Asked by Jonnel Young on Jun 10, 2024
Verified
Paul Volcker, former chair of the Fed, implemented
A) contractionary policy, which increased the popularity of the U.S.president who had appointed him.
B) contractionary policy, which decreased the popularity of the U.S.president who had appointed him.
C) expansionary policy, which increased the popularity of the U.S.president who had appointed him.
D) expansionary policy, which decreased the popularity of the U.S.president who had appointed him.
Paul Volcker
A former Chairman of the Federal Reserve known for his measures to combat inflation through high interest rates in the late 1970s and early 1980s.
Contractionary Policy
Economic policy measures aimed at reducing spending or increasing taxes to slow down an overheating economy.
U.S. President
The U.S. President is the head of state and head of government of the United States, and is responsible for the executive branch of the federal government.
- Recognize the immediate and prolonged effects of decisions made in monetary policy on inflation and unemployment rates.
Verified Answer
RK
Rastko KojovicJun 15, 2024
Final Answer :
B
Explanation :
Paul Volcker, appointed by President Jimmy Carter, implemented a contractionary monetary policy to combat high inflation, which involved raising interest rates. This move was initially unpopular as it led to a recession and decreased Carter's popularity, contributing to his loss in the 1980 reelection.
Learning Objectives
- Recognize the immediate and prolonged effects of decisions made in monetary policy on inflation and unemployment rates.