Multiple Choice
In early 1975, the United States experienced a significant output gap. What does a negative output gap indicate about the economy during that period?
21
views
1. Introduction to Macroeconomics
Introduction to Economics
Struggling with Macroeconomics?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Which of the following best describes a monetary policy tool?
A
Increasing government spending on infrastructure
B
Imposing tariffs on imported goods
C
Setting minimum wage laws
D
Changing the interest rate to influence economic activity
Verified step by step guidance1
Understand that monetary policy tools are actions taken by a country's central bank to influence the money supply and interest rates, thereby affecting economic activity.
Recognize that increasing government spending on infrastructure is a fiscal policy tool, as it involves government budget decisions rather than central bank actions.
Identify that imposing tariffs on imported goods is a trade policy tool, which affects international trade rather than money supply or interest rates.
Know that setting minimum wage laws is a labor market policy, which regulates wages but does not directly influence monetary conditions.
Conclude that changing the interest rate is a classic monetary policy tool because it directly affects borrowing costs, money supply, and overall economic activity.
4:30mWatch next
Master Defining Economic Terms: Scarcity, Trade-offs, and Opportunity Costs with a bite sized video explanation from Brian
Start learningRelated Videos
Related Practice
Introduction to Economics practice set
Problem sets built by lead tutorsExpert video explanations