Under Paul Volcker the Fed Reduced the Inflation Rate in the Early

question 21

Multiple Choice

Under Paul Volcker the Fed reduced the inflation rate in the early 1980s by over 10 percent causing

• A) unemployment to decrease and a severe recession to take place.
• B) housing prices to soar and interest rates to remain high.
• C) GDP growth rise to 6 percent and consumer confidence to grow.
• D) None of the answers is correct.

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Definitions:

Endorphins

The body’s own natural painkillers, which block pain and produce a feeling of well-being.

Sensory Systems

Refer to the complex network of neural mechanisms designed to process sensory information from the environment and the body.

Hallucination

An imaginary sensation.

Auditory

Relating to the sense of hearing or the system responsible for processing sound.