Assume That the Price Level Is Flexible Both Upward and Downward

question 152

Multiple Choice

Assume that the price level is flexible both upward and downward and that the Fed's policy is to keep the price level from either rising or falling.If aggregate supply increases in the economy, the Fed

• A)will have to increase interest rates to keep the price level from falling.
• B)will have to reduce the money supply to keep the price level from rising.
• C)will have to increase the money supply to keep the price level from falling.
• D)can keep the price level stable without altering the money supply or interest rate.

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Definitions:

Great Migration

The movement of over 6 million African Americans from the rural Southern United States to urban areas in the North, Midwest, and West from around 1916 through the 1970s.

Twenty-First Century

The current century, spanning from January 1, 2001, to December 31, 2100, marked by rapid technological advancement and globalization.

African Americans

People in the United States with ancestry from Africa, particularly those whose ancestors were brought to America through the transatlantic slave trade.

African-American Populations

Communities of people in America of African descent, including both recent immigrants and those whose ancestors were enslaved in the United States.