Which of the Following Is the Least Likely Take Place

question 24

Multiple Choice

Which of the following is the least likely take place if the Fed responds to a negative demand shock by reducing the real interest rate?

• A)IS shifts to the right
• B)output gap returns to zero
• C)inflation returns to its previous rate
• D)MP shifts down

---

Definitions:

Psychodynamic Perspective

A psychological perspective that emphasizes unconscious processes and childhood experiences in shaping behavior and personality.

Conscious

The state of being aware of and able to think about one's own thoughts, feelings, and perceptions, as well as the external world.

Unconscious

Refers to the part of the mind that is inaccessible to the conscious mind but that affects behaviors and emotions.

Mental Processes

Internal cognitive operations that include thinking, reasoning, and problem-solving.