59. Which of the following best explains the term “helicopter hoover”?
59. Which of the following best explains the term “helicopter hoover”?
The correct option is B b) Reduction of money supply
59 Ans B
Explanation: Helicopter money, a helicopter drop is a hypothetical, unconventional tool of monetary policy that involves printing large sums of money and distributing it to the public in order to stimulate the economy. Helicopter money has been proposed as an alternative to Quantitative Easing (QE) when interest rates are close to zero and the economy remains weak or enters recession. Economists have used the term ‘helicopter money’ to refer to two very different policies.
The first set of policies emphasizes the ‘permanent’ monetization of budget deficits. The second set of policies involves the central bank making direct transfers to the private sector financed with base money, without the direct involvement of fiscal authorities. This has also been called a citizens’ dividend or a distribution of future seignior age. The idea was made popular by the American economist Milton Friedman in 1969.
b) Reduction of money supply
59 Ans B
Explanation: Helicopter money, a helicopter drop is a hypothetical, unconventional tool of monetary policy that involves printing large sums of money and distributing it to the public in order to stimulate the economy. Helicopter money has been proposed as an alternative to Quantitative Easing (QE) when interest rates are close to zero and the economy remains weak or enters recession. Economists have used the term ‘helicopter money’ to refer to two very different policies.
The first set of policies emphasizes the ‘permanent’ monetization of budget deficits. The second set of policies involves the central bank making direct transfers to the private sector financed with base money, without the direct involvement of fiscal authorities. This has also been called a citizens’ dividend or a distribution of future seignior age. The idea was made popular by the American economist Milton Friedman in 1969.
