5.4 Economic Policy: Influential Theories

Question 1

According to the Fed, what were the major problems during the financial crisis of 2008? Check all that apply.

Revolt · Accepted Answer

The money supply became less liquid.; Lending and credit stopped.; It was difficult for banks to receive the loans needed to have cash required to function.

Question 2

Which factors did you include in your response? Check any that apply.

Revolt · Accepted Answer

the specific actions take by the Fed

Question 3

Use the drop-down menus to complete each sentence. was an economist who led a new school of classical economics. The concept of laissez faire refers to government intervention in the economy. The theory that governments should assist in economic crises through fiscal and monetary policy can be credited to .

Revolt · Accepted Answer

Smith; was an economist who led a new school of classical economics.: Smith; The concept of laissez faire refers to government intervention in the economy.: little

Question 4

✔ littlelargeunlimited

Revolt · Accepted Answer

little

Question 5

The theory that governments should assist in economic crises through fiscal and monetary policy can be credited to [___].

Revolt · Accepted Answer

Keynes

Question 6

Use the drop-down menus to complete each sentence. According to the theories of Friedrich August von Hayek, the economy may be too complicated to think in terms of . Hayek believed that was dangerous and could lead to severe inflation. Milton Friedman supported changes to policy to influence economic growth.

Revolt · Accepted Answer

aggregates; Selection 1: aggregates; Selection 2: expansionary policy; Selection 3: monetary

Question 7

contractionary policy✔ expansionary policy

Revolt · Accepted Answer

expansionary policy

Question 8

taxationspending✔ monetary

Revolt · Accepted Answer

monetary

Question 9

Use the drop-down menus to complete each sentence.

Revolt · Accepted Answer

A notable action taken by the Fed during the financial crisis of 2008 was carrying out open market operations, which was intended to lower the .: Federal Funds Rate; The actions taken by the Fed have immediate positive results, despite the fact that the Federal Funds Rate reached nearly .: did not; The actions taken by the Fed have immediate positive results, despite the fact that the Federal Funds Rate reached nearly .: 0%

Question 10

did✔ did not

Revolt · Accepted Answer

did not

5.4 Economic Policy: Influential Theories Answers

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