Using the Liquidity-Preference Model, When the Federal Reserve Decreases the Money

question 152

Multiple Choice

Using the liquidity-preference model, when the Federal Reserve decreases the money supply,

• A)the equilibrium interest rate increases.
• B)the aggregate-demand curve shifts to the right.
• C)the quantity of goods and services demanded is unchanged for a given price level.
• D)the short-run aggregate-supply curve shifts to the left.

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Definitions:

Episodic Hormone Secretion

The pattern of hormone release in pulses or bursts, rather than continuously, to regulate various bodily functions.

Monthly Cycle

The menstrual cycle is a series of natural changes in hormone production and the structures of the uterus and ovaries of the female reproductive system.

Receptor Molecules

Proteins on the surface of cells or within cells that bind to specific molecules, triggering a response.

Target Cells

Cells that are specifically affected by hormones or other biochemical signals.