Exhibit 15-6 -If the Fed Is Targeting Interest Rates and Money Demand

question 66

Multiple Choice

Exhibit 15-6
-If the Fed is targeting interest rates and money demand shifts from D_m to D_m' in Exhibit 15-6,the Fed will

• A)do nothing and the interest rate will rise to i'
• B)do nothing and the interest rate will settle at i
• C)decrease the money supply to restore its target of i
• D)increase the money supply to restore its target of i
• E)decrease money demand back to D_m to restore its target of i

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Definitions:

Cultural Genocide

Cultural genocide is the deliberate destruction of the cultural heritage of a people or nation for the purpose of eliminating their way of life, beliefs, and identity.

Expulsion

The act of being forced out or removed from a place or situation, often as a form of punishment or as a consequence of policy or law.

Nonconformity

A term used to describe a situation where goods delivered under a contract do not meet the specifications or expectations outlined in the agreement.

Liable

Liable means being legally responsible for an action or outcome, often involving the obligation to make restitution or compensation.