If the Fed Raises the Interest Rate, the First Effect

question 225

Multiple Choice

If the Fed raises the interest rate, the first effect in an AS/AD figure is a ________ shift of the ________ curve.

• A) rightward; AD
• B) leftward; AD
• C) rightward; SAS
• D) leftward; SAS

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Definitions:

Wilhelm Wundt

A German physician, physiologist, and philosopher widely regarded as the father of experimental psychology, who established the first psychology laboratory.

Psychologists

Professionals specializing in the study of the mind and behavior.

Basic Research

Fundamental scientific research aimed at increasing knowledge or understanding of the subject without immediate practical application in mind.

Applied Research

A form of systematic inquiry involving the practical application of science. It accesses and uses some part of the research communities' (the academia's) accumulated theories, knowledge, methods, and techniques, for a specific, often state-, business-, or client-driven purpose.