Refer to the Following Figure When Answering the Following Questions

question 67

Multiple Choice

Refer to the following figure when answering the following questions.
Figure 12.2: IS-MP Curve
-Consider Figure 12.2. If the stock market drops sharply, there is a loss in consumer and investor confidence and the economy moves from point ________. To prevent a ________, the Fed ________, and the economy moves from point ________.

• A) a to d; recession; lowers interest rates; d to b
• B) d to c; recession; lowers interest rates; c to b
• C) c to b; bubble; raises interest rates; b to c
• D) a to d; recession; lowers interest rates; d to c
• E) Not enough information is given.

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Definitions:

Volcanic Gas

Gases emitted from a volcano, including water vapor, carbon dioxide, sulfur dioxide, hydrogen sulfide, and other volcanic gases.

Convergent

Pertaining to areas where tectonic plates move towards each other, often resulting in mountain building or subduction.

Divergent

Relates to a tectonic boundary where two plates move away from each other, leading to the creation of new crust.

Transform

In geology, referring to a boundary between two tectonic plates where they slide past each other horizontally.