The Short Run Sequence of Events Following an Unanticipated Shift

question 161

Multiple Choice

The short run sequence of events following an unanticipated shift to a more restrictive monetary policy would be

• A) lower interest rates, decrease in aggregate demand, and a reduction in output.
• B) lower interest rates, increase in aggregate demand, and an expansion in output.
• C) higher interest rates, decrease in aggregate demand, and a reduction in output.
• D) higher interest rates, increase in aggregate demand, and an expansion in output.

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Definitions:

Generalized Anxiety Disorder

A mental health disorder characterized by persistent and excessive worry about various aspects of life, beyond what might be expected from daily stresses.

Continually Tense

Experiencing persistent and ongoing feelings of tension or stress, without relaxation.

Apprehensive

Feeling anxious or fearful that something bad or unpleasant will happen.

Psychoanalytic Perspective

A theory of personality and therapeutic technique that attributes thoughts and actions to unconscious motives and conflicts.