Using the Liquidity-Preference Model, When the Federal Reserve Increases the Money

question 69

Multiple Choice

Using the liquidity-preference model, when the Federal Reserve increases the money supply,

• A)the equilibrium interest rate decreases.
• B)the aggregate-demand curve shifts to the left.
• C)the quantity of goods and services demanded is unchanged for a given price level.
• D)the long-run aggregate-supply curve shifts to the right.

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Definitions:

Epigenetic Principle

A concept in Erikson's theory of psychosocial development that proposes growth and development are governed by the unfolding of our predetermined personality.

Maturation

The developmental progression that leads to gain in skills, knowledge, and capabilities, both physically and psychologically.

Biological Factors

Refer to physiological, genetic, and neurological conditions that affect an individual's behavior and traits.

Social Factors

Aspects of society that influence individuals' behaviors, attitudes, and life chances.