Select all the options that relate to the following scenarios. The government selling 2 billion dollars worth of bonds to the public

INFLATION

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Select all the options that relate to the following scenarios. “The government selling 2 billion dollars worth of bonds to the public”

A	Inflationary Measures
B	Deflationary Measures
C	Contractionary Monetary Policy
D	Expansionary Monetary Policy
E	Contractionary Fiscal Policy

Explanation:

Detailed explanation-1: -It is a macroeconomic tool used to combat rising inflation. The main contractionary policies employed by the United States government include raising interest rates, increasing bank reserve requirements, and selling government securities.

Detailed explanation-2: -Expansionary monetary policy includes purchasing government bonds, decreasing the reserve requirement, and decreasing the federal funds interest rate. Contractionary monetary policy includes selling government bonds, increasing the reserve requirement, and increasing the federal funds interest rate.

Detailed explanation-3: -Reduced inflation The inflation level is the main target of a contractionary monetary policy. By reducing the money supply in the economy, policymakers are looking to reduce inflation and stabilize the prices in the economy.

Detailed explanation-4: -Lower the short-term interest rates. Reduce the reserve requirements. Expand open market operations (buy securities) Stimulation of economic growth. Increased inflation. Currency devaluation. Decreased unemployment. 06-Dec-2022

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ECONOMICS (CBSE/UGC NET)

ECONOMICS

INFLATION