If the Fed Sells Bonds And, Thereby, Unexpectedly Shifts to a More

question 46

Multiple Choice

If the Fed sells bonds and, thereby, unexpectedly shifts to a more restrictive monetary policy, in the short run, the primary impact of this policy will tend to

• A) increase inflation.
• B) reduce unemployment.
• C) increase real output.
• D) increase real interest rates.

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Definitions:

Personal Wealth

The total value of an individual's assets, including money, property, and investments, minus all debts.

Power

The ability or capacity to do something or act in a particular way, often involving the control over resources or people.

Negative Emotions

Feelings that are generally considered to be displeasing or unfavorable, such as sadness, anger, fear, and guilt, which can impact mental and physical well-being.

Bad News

Information that is unwelcome, unpleasant, or disappointing.