The Reserve Bank Increases Interest Rates to Reduce the Level

question 63

Multiple Choice

The Reserve Bank increases interest rates to reduce the level of spending in the economy.As the rate of growth in economic activity slows,the demand for funds also slows.This impact of a change in interest rates is described as the:

• A) inflation effect.
• B) liquidity effect.
• C) income effect.
• D) monetary effect.

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Definitions:

General Adaptation Syndrome (GAS)

A theoretical model describing the body's short-term and long-term reactions to stress.

Selye's GAS

General Adaptation Syndrome, a theory introduced by Hans Selye, describing the body's short-term and long-term reactions to stress.

Historical Racism

Discriminatory practices and beliefs rooted in history that have systematically oppressed individuals or groups based on race.

High Blood Pressure

A condition in which the force of the blood against the artery walls is too high, often leading to health problems.