Question

when the federal reserve began its policy of quan

UESTION 38 When the Federal Reserve began its policy of quantitative easing in November 2008, there wasin the monetary base. ︵ a a decline Ob. a dramatic increase c. no change O d. a slight increase QUESTION 42 monetary policy. In the current year, a shock has lowered the inflation rate from 1.5% The central bank of Substantia uses a price level target to conduct to 1.0%. Following the shock, firms and households can expect an inflation rate of 0 a. 2.5%. b. 2.0%. c. 1.5%. d. 1

Answer 1

38) When the Federal reserve began quantitative easing in 2008, the monetary base of the economy was declining. To boost the economy i.e., this is an expansionary monetary policy.

42) Price level target monetary policy is used to achieve the price level targets set in the economy. If the inflation in the economy is rising the price levels shall be decreased. So in this case the inflation has come down from 1.5% to 1%. It means the price levels shall be increased.