Evidence points out that since the mid-1950's just about every recession was preceded by rising interest rates. This suggests that the recessions were:
A) caused in part by the actions of the Federal Reserve.
B) the result of changes in consumer confidence.
C) due to increases in oil prices and other production costs.
D) caused by simultaneous shifts in aggregate demand and aggregate supply.

Question

Quizplus · Accepted Answer

The fact that rising interest rates preceded every recession since the mid-1950s suggests that the actions of the Federal Reserve, which controls interest rates, played a role in causing these recessions. When the Federal Reserve raises interest rates, it becomes more expensive for businesses to borrow money, which can lead to a decrease in investment and a slowdown in economic growth.

Evidence Points Out That Since the Mid-1950's Just About Every