The Aggregate Demand Curve Shifts to the Left When the Fed

question 95

Multiple Choice

The aggregate demand curve shifts to the left when the Fed:

• A)increases its target inflation rate, reflected by a downward shift in the Fed's policy reaction function.
• B)decreases its target inflation rate, reflected by an upward shift in the Fed's policy reaction function.
• C)increases real interest rates in response to inflation, but does not change its target inflation rate or the Fed's policy reaction function.
• D)decreases real interest rates in response to inflation, but does not change its target inflation rate or the Fed's policy reaction function.

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Definitions:

Oligodendrocytes

Glial cells in the central nervous system that produce myelin, a substance that insulates nerve fibers to increase the speed at which impulses are conducted.

CNS Cavities

Hollow spaces within the central nervous system, including ventricles in the brain, filled with cerebrospinal fluid.

Astrocytes

Astrocytes are star-shaped glial cells in the brain and spinal cord involved in providing support and nutrition to nerve cells, maintaining the blood-brain barrier, and repairing the brain and spinal cord following traumatic injuries.

Microglia

Specialized immune cells found in the brain and spinal cord, involved in the maintenance of nerve cells and the response to injury or disease.