When the Central Bank Lowers Its Target Inflation Rate, It

question 43

Multiple Choice

When the central bank lowers its target inflation rate, it _____ the nominal and real interest rate, which shifts the dynamic aggregate demand curve to the _____.

• A) lowers; right
• B) lowers; left
• C) raises; right
• D) raises; left

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Definitions:

Formula

A mathematical relationship or rule expressed in symbols, or a prescribed and detailed method of doing something.

Malnutrition

A condition that occurs from consistently eating a diet in which nutrients are either not enough or are too much, causing health problems.

Stunting

The failure of children to grow to a normal height for their age due to severe and chronic malnutrition.

Neurons

Specialized cells of the nervous system that transmit information to other neurons, muscles, or gland cells.