Under the Reasonable Dynamic Assumptions Discussed in the Text,a Monetary

question 37

Multiple Choice

Under the reasonable dynamic assumptions discussed in the text,a monetary contraction should result in

• A)an immediate rise in the interest rate, and no further interest rate changes.
• B)an immediate rise in the interest rate, and then a fall in the interest rate over time.
• C)an immediate rise in the interest rate, and then a further rise over time.
• D)a very gradual but steady rise in the interest rate to its new equilibrium level.
• E) no change in the interest rate initially, and then a sudden rise to its new equilibrium value.

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Definitions:

Automobiles

Wheeled motor vehicles used for transportation, typically powered by an internal combustion engine or electric motor.

Country of Origin

The country in which a person was born or where a product was manufactured or created.

Conditional Distribution

the probability distribution of a subset of variables given the values of other variables.

Blood Pressure

the force exerted by circulating blood on the walls of blood vessels.