When Expansionary Monetary Policy Pushes Real Interest Rates to an Artificial

question 18

Multiple Choice

When expansionary monetary policy pushes real interest rates to an artificial low, the Austrian view of the business cycle predicts this will lead to

• A)an increase in aggregate demand and a lengthy expansion in real output.
• B)a recession, followed by a strong and lengthy expansion in real output.
• C)malinvestment during an economic boom, followed by a recession.
• D)malinvestment during a temporary recession, followed by a strong and lengthy economic boom.

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Definitions:

Alveolates

Alveolates are a group of protists characterized by the presence of alveoli, small cavities enclosed by membranes located just under the cell surface, and include taxa such as dinoflagellates, apicomplexans, and ciliates.

Brown Algae

A group of photosynthetic, multicellular marine algae, including species like kelp, that are typically brown in color due to the presence of carotenoid pigments.

Single-Celled

Referring to organisms that consist of only one cell, carrying out all the functions necessary for life.

Dinoflagellates

A phylum of microorganisms found in marine and freshwater environments, known for their ability to conduct photosynthesis and for some species, to produce bioluminescence and harmful algal blooms.