The Fed's Policy Actions of Reacting to Higher Inflation by Raising

question 20

Multiple Choice

The Fed's policy actions of reacting to higher inflation by raising the real interest rate during 2004-2006 were

• A)upward movements along the monetary policy curve.
• B)downward movement along the monetary policy curve.
• C)upward shifts of the monetary policy curve.
• D)downward shifts of the monetary policy curve.

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Definitions:

GDP

Short for Gross Domestic Product, it's the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period.

MV

An abbreviation that can stand for "Market Value," representing the current price at which an asset or service can be bought or sold.

Percentage

A portion or part of a whole, expressed as a fraction of 100.

Constants

Fixed values in an equation or model that do not change, unlike variables which can fluctuate.