Figure 17-8

-In Figure 17-8, which of the following movements reflects the Fed's anti-inflationary policy of the early 1980s and the following market adjustment?

Question

Figure 17-8
 
-In Figure 17-8, which of the following movements reflects the Fed's anti-inflationary policy of the early 1980s and the following market adjustment?

Quizplus · Accepted Answer

The movement from C to D reflects the Fed's anti-inflationary policy of the early 1980s which was followed by a market adjustment. This is because the Fed raised interest rates to combat inflation, which caused the stock market to decline. The movement from D to E reflects the subsequent recovery in the stock market. The movements from A to B to C do not reflect the Fed's policy or the market adjustment, and the movements from E to A to B and D to E to C do not make sense in the context of the question.

Figure 17-8 -In Figure 17-8, Which of the Following Movements Reflects the Following