If the Fed Adopts a Policy of Pegging the Interest

question 23

Multiple Choice

If the Fed adopts a policy of pegging the interest rate,a ________ in government spending forces the Fed to increase the money supply to prevent interest rates from ________.

• A)fall;increasing
• B)fall;decreasing
• C)rise;decreasing
• D)rise;increasing

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Definitions:

Spinal Cord

A long, thin, tubular bundle of nervous tissue and support cells that extends from the brainstem down the back, transmitting neural signals between the brain and the rest of the body.

Sympathetic Nervous System

Part of the autonomic nervous system that activates the body's fight-or-flight response during stressful situations.

Parasympathetic Nervous System

A division of the autonomic nervous system responsible for conserving energy and lowering the heart rate, among other actions, to maintain homeostasis.

Autonomic Nervous System

The part of the nervous system responsible for control of the bodily functions not consciously directed, such as breathing, the heartbeat, and digestive processes.