If the Fed Believes There Has Been a Positive Wealth

question 167

Multiple Choice

If the Fed believes there has been a positive wealth effect, it will want to

• A)raise interest rates to reduce inflationary pressure.
• B)raise interest rates to reduce prices.
• C)lower interest rates to increase potential GDP.
• D)lower interest rates to offset the increase in wealth.
• E)raise interest rates to encourage saving and investment.

---

Definitions:

Technological Innovation

The introduction and application of new technologies or improvements to existing technologies to create more effective products, processes, or services.

Karl Marx

A 19th-century philosopher, economist, and political theorist best known for his works on socialism and communism.

Capitalist Societies

Societies organized around the principles of capitalism, where private ownership, the profit motive, and market competition dominate economic and social relations.

Collective Resistance

The act of groups working together to oppose or resist authority, policy, or convention deemed unjust.