If the Demand for Real Money Balances Were Completely Insensitive

question 84

Multiple Choice

If the demand for real money balances were completely insensitive to the opportunity cost of holding money,

• A)the money market would never be in equilibrium.
• B)the goods market would never be in equilibrium.
• C)the LM curve would be vertical.
• D)the LM curve would be horizontal.

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Definitions:

Shaping Behavior

The process of reinforcing successive approximations of a desired behavior to teach a new behavior or skill.

Negative Punishment

A decrease in behavior that results from a removed consequence.

Skinnerian Principles

Behavioral principles based on the work of B.F. Skinner, emphasizing the effects of reinforcement and punishment on behavior.

Aggressive Behavior

Actions meant to harm or intimidate others, driven by feelings of anger and hostility.