Which of the Following Economic Variables Is Affected When the Central

question 40

Multiple Choice

Which of the following economic variables is affected when the central bank adopts a countercyclical monetary policy?

• A) Government spending
• B) Transfer payments
• C) Tax rates
• D) Interest rates

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Definitions:

Somatic

Relating to or affecting the body, distinct from the mind.

Central

Pertaining to the main or most important part of something; often used in psychology to describe core processes or systems.

Parasympathetic Nervous System

A division of the autonomic nervous system responsible for conserving energy and returning the body to a restful state after stress or activity.

Sympathetic Nervous System

A part of the autonomic nervous system that activates what is often termed the fight or flight response.