The Price-Anticipation Effect on Interest Rates

question 6

Multiple Choice

The price-anticipation effect on interest rates:

• A) reflects the decrease in the supply of credit as a result of future expected inflation
• B) reflects the increase in the supply of credit as a result of future expected inflation
• C) reflects the decrease in the supply of credit as a result of future expected inflation rate
• D) reflects the increase in the supply of credit on inflation and future expected inflation

---

Definitions:

Reticular Formation

A complex network of neural pathways in the central core of the brainstem involved in controlling arousal and consciousness.

Thalamus

A structure in the middle of the brain that acts as a relay station, directing sensory and motor signals to the cerebral cortex.

Cerebral Cortex

The external surface of the cerebrum, crucial for functions such as memory, attention, perception, thinking, consciousness, language, and awareness.

Temporal Lobes

Sections of the brain located on both sides of the head above the ears, involved in processing auditory information and memory.