Targeting Interest Rates Can Be Procyclical Because

question 49

Multiple Choice

Targeting interest rates can be procyclical because

• A)an increase in income increases interest rates,causing the Fed to buy bonds,increasing the monetary base and money supply,leading to further increases in income.
• B)an increase in interest rates increases income,causing the Fed to buy bonds,increasing the monetary base and money supply,leading to further increases in income.
• C)an increase in the monetary base increases the money supply,causing the Fed to buy bonds,increasing the monetary base and money supply,leading to further increases in income.
• D)an increase in income increases the monetary base and money supply,causing the Fed to buy bonds to increase interest rates and income.

---

Definitions:

Primary Sex Characteristic

Physical features that are directly involved in reproduction, such as the ovaries in females and the testes in males.

Ovaries

Female reproductive organs that produce eggs and hormones, including estrogen and progesterone.

Adrenal Glands

Small glands located above the kidneys that produce hormones such as adrenaline and cortisol, which are involved in stress responses.

Y Chromosome

A sex chromosome that is typically present in males, carrying genes that determine male sexual traits.