If Inflation Is a Threat, Then the Fed Will Conduct

question 69

Multiple Choice

If inflation is a threat, then the Fed will conduct monetary policy aimed at

• A) increasing the interest rate which then will shift aggregate demand to the right.
• B) decreasing the interest rate which then will shift aggregate demand to the right.
• C) decreasing the interest rate which then will shift aggregate demand to the left.
• D) increasing the interest rate which then will shift aggregate demand to theleft.

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Definitions:

Air Disc Brakes

A type of brake system used in vehicles, particularly heavy-duty trucks and buses, that uses air pressure to push pads onto a disc to create friction and stop the vehicle.

Mechanical Braking Efficiencies

The effectiveness and performance efficiency of a mechanical braking system in converting kinetic energy into heat energy to stop a vehicle.

Drum Brakes

A brake system in which a rotating drum fixed to the wheel assembly turns around stationary friction-faced shoes. Braking action is achieved when the shoes are forced into the drum inside diameter. The common foundation brake system used on trucks using S-cam actuation of the shoes.

S-cam Type Foundation Brakes

A type of drum brake system commonly used in heavy vehicles, where an S-shaped cam forces the brake shoes apart and against the drum to create friction and stop the vehicle.