The Fed Raised Interest Rates in 2004 and 2005

question 11

Multiple Choice

The Fed raised interest rates in 2004 and 2005.This implies,other things the same,that the Fed

• A)increased the money supply because it was concerned about unemployment.
• B)increased the money supply because it was concerned about inflation.
• C)decreased the money supply because it was concerned about unemployment.
• D)decreased the money supply because it was concerned about inflation.

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Definitions:

Homeostasis

The ability of an organism to maintain internal equilibrium by adjusting its physiological processes.

Drive-Reduction Theory

A psychological theory that posits motivation is based on the goal of eliminating uncomfortable internal states caused by unmet needs.

Homeostasis

The inclination of a biological system to preserve equilibrium by adapting to conditions ideal for survival.

Drive

An innate, biologically determined urge to attain a goal or satisfy a need.