An Increase in Interest Rates by the Fed Based on a Given

question 14

Multiple Choice

An increase in interest rates by the Fed based on a given and unchanged policy reaction function represents a ________ the aggregate demand curve, and higher interest rates resulting from an upward shift in the Fed's policy reaction function represents a ________ the aggregate demand curve.

• A)shift left of; movement up
• B)movement up; shift left of
• C)shift left of; shift right of
• D)movement up; shift right

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Definitions:

Defense Mechanism

Defense Mechanism refers to psychological strategies brought into play by individuals unconsciously to protect themselves from anxiety or to face reality.

Rationalization

is the cognitive process of making seemingly acceptable explanations for behaviors that are actually irrational, often to justify personal decisions and actions.

Projection

A psychological defense mechanism where individuals attribute their own unwanted feelings, impulses, or thoughts to others.

Displacement

In psychology, a defense mechanism involving the transfer of an emotional response from the original stimulus to a substitute target.