The Federal Reserve Issues a Report Indicating That Future Inflation

question 28

Multiple Choice

The Federal Reserve issues a report indicating that future inflation will be higher than had previously seemed likely. As a result

• A)the supply curve for bonds shifts to the right.
• B)the demand curve for loanable funds shifts to the left.
• C)the equilibrium interest rate falls.
• D)the equilibrium price of bonds rises.

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Definitions:

Amygdala

An almond-shaped mass of gray matter inside each cerebral hemisphere, involved with the experiencing of emotions.

Emotion

A complex psychological state involving an experiential, physiological, and behavioral response to a personally significant situation.

Reticular Formation

A network of neurons located in the brainstem that plays a key role in controlling arousal and alertness.

Higher Brain Regions

Parts of the brain associated with complex functions such as thinking, decision making, emotion, and consciousness, typically including the cerebral cortex and associated structures.