In Late 2007, the Fed Began a Series of Cuts

question 83

Multiple Choice

In late 2007, the Fed began a series of cuts in the federal funds rate. Because the core inflation rate was about two percent, the most likely reason for these interest rate cuts was

• A)to reduce the natural unemployment rate.
• B)to increase the real interest rate.
• C)to raise the price of the dollar in the foreign exchange market.
• D)to encourage households to save more money.
• E)to avoid a recession.

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Definitions:

Allegiance Effect

The phenomenon in psychotherapy research where the therapist's belief in the effectiveness of the therapy they provide influences the outcomes of the therapy.

Oedipal Complex

A psychoanalytic theory describing a child's feelings of desire for the opposite-sex parent and jealousy toward the same-sex parent.

Psychodynamic Psychotherapy

A therapeutic approach emphasizing the psychological roots of emotional suffering, with a focus on insight, patterns of relationships, and the dynamics of personality.

Empirical Study

Research based on observed and measured phenomena and derives knowledge from actual experience rather than theory or belief.