When the Fed Buys Bonds in the Open Market, in the Product

question 145

Multiple Choice

When the Fed buys bonds in the open market, in the product market (the aggregate demand- aggregate supply model) ,

• A) real GDP will fall and the price level will rise.
• B) real GDP and the price level will rise.
• C) real GDP and the price level will fall.
• D) real GDP will rise and the price level will fall.

---

Definitions:

Operant Conditioning

Skinner’s term for the process of learning in which an organism’s behavior is shaped by the effect of the behavior on the environment.

Respondent Conditioning

Skinner’s term for classical conditioning.

Habituation

The process of becoming accustomed to a stimulus or environment, resulting in a decreased response over time.

Learning Mechanism

Processes through which individuals acquire new knowledge, skills, behaviors, or values, often through observation, experience, or instruction.