When There Is a Threat of Inflation in the Economy,the

question 95

Multiple Choice

When there is a threat of inflation in the economy,the Fed can ________ the federal funds rate so as to ________ aggregate demand and ________ the price level.

• A)lower;increase;decrease
• B)raise;decrease;increase
• C)lower;increase;increase
• D)raise;decrease;decrease
• E)raise;increase;decrease

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Definitions:

Lecompton Constitution

A proposed Kansas state constitution (1857) supporting slavery; it was ultimately rejected after much controversy.

Proslavery Constitution

A constitution or constitutional amendments that legitimize or promote the practice of slavery, often used to refer to historical documents in the United States prior to the Civil War.

Kansas

A U.S. state located in the Midwestern region, known for its contributions to agricultural outputs, such as wheat and corn.

Free Labor Ideology

The belief that labor should be free to choose where and for whom they work, contrasting with the system of slavery.