If Inflation Increases, the Central Bank Acts to Raise Interest

question 39

Multiple Choice

If inflation increases, the central bank acts to raise interest rates in order to

• A)increase the money supply.
• B)reduce real GDP.
• C)increase real GDP.
• D)increase potential GDP.
• E)reduce potential GDP.

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Definitions:

External Locus of Control

The belief that one's success or failure results from external forces beyond one's control.

Internal Locus of Control

The belief that one can control their own destiny and that outcomes are the result of individual actions rather than external forces.

Bandura's Theory

Developed by Albert Bandura, this theory emphasizes the importance of observational learning, imitation, and modeling in behavior.

Type A

A personality typology characterized by competitiveness, urgency, and aggression, often associated with a higher risk of stress-related illnesses.