If the Reserve Bank Decides That It Wants to Lower

question 16

Multiple Choice

If the Reserve Bank decides that it wants to lower the unemployment rate, it ________ the growth rate of aggregate demand by ________ the growth rate of money and ________ interest rates.

• A) accelerates; accelerating; raising
• B) reduces; accelerating; lowering
• C) accelerates; accelerating; lowering
• D) accelerates; reducing; lowering
• E) accelerates; reducing; raising

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Definitions:

Undercapitalization

The lack of funds to operate a business normally.

Small-Business Failure

A situation where a small-sized business is unable to continue operation due to financial, managerial, or market-related problems.