When There Is a Threat of Inflation in the Economy

question 221

Multiple Choice

When there is a threat of inflation in the economy, the Fed can ________ the federal funds rate so to ________ aggregate demand and ________ the price level.

• A)lower; increase; decrease
• B)raise; decrease; increase
• C)lower; increase; increase
• D)raise; decrease; decrease
• E)raise; increase; decrease

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Definitions:

Unlearned Behaviour

An innate or instinctive behavior that occurs without the need for learning or prior experience.

Systematic Desensitization

A therapy technique used to treat phobias and anxiety disorders by gradually exposing the patient to the feared object or context without any danger.

Dog Phobia

An intense, irrational fear of dogs, often leading to avoidance behavior.

Complete Relax

A state or condition of complete rest and freedom from stress or tension.