An Unanticipated Shift to a More Restrictive Monetary Policy by the Fed

question 45

Multiple Choice

An unanticipated shift to a more restrictive monetary policy by the Fed will

• A) increase real interest rates and, thereby, reduce investment, current consumption, and aggregate demand.
• B) reduce real interest rates, leading to a depreciation of the dollar and an expansion in net exports and aggregate demand.
• C) increase real interest rates, leading to higher asset prices that will stimulate aggregate demand.
• D) reduce real interest rates and, thereby, stimulate investment, current consumption, and aggregate demand.

---

Definitions:

Emotional Distress

A legal term referring to the suffering that comes from experiencing intensely negative emotions due to another's actions.

Defamation Per Se

Statements presumed to be harmful to one's reputation without needing proof of harm, typically involving false accusations of criminal behavior or a lack of professional integrity.

Proof of Injury

Evidence required in a legal context to demonstrate the existence and extent of an injury sustained by an individual.

Harm Required

A legal principle that for a lawsuit to be filed, the plaintiff must demonstrate that they have suffered some form of harm.