If the Federal Reserve is late to recognize a recession and implements an expansionary policy too late, the result could be an increase in inflation during the beginning of the next phase. Even though the goal had been to reduce the severity of the recession, the poor timing caused another problem: inflation. This is an example of what type of policy?

A. Procyclical policy

B. Countercyclical policy

C. Tight policy

D. Fiscal policy

Question

Business

Myles Schultz

29 March, 17:56

If the Federal Reserve is late to recognize a recession and implements an expansionary policy too late, the result could be an increase in inflation during the beginning of the next phase. Even though the goal had been to reduce the severity of the recession, the poor timing caused another problem: inflation. This is an example of what type of policy?

A. Procyclical policy

B. Countercyclical policy

C. Tight policy

D. Fiscal policy

+4

Answers (1)

Know the Answer?

Camille Stanley · Answer 1

A. Procyclical policy.

Explanation:

Procyclical policy is basically is a government approach to increase goverment spending and reduces taxes while government is going through economic expansion.