Which of the Following Best Depicts the Short-Run Effect of a Price

question 59

Multiple Choice

Which of the following best depicts the short-run effect of a price shock due to a large increase in oil prices?

• A)The IA line shifts up, causing interest rates to rise, which causes the AD curve to shift to the right.
• B)The IA line shifts up, causing interest rates to rise, which causes a leftward movement along the AD curve.
• C)The AD curve shifts to the left, causing interest rates to rise, which causes the IA line to shift down.
• D)The IA line shifts down, causing interest rates to rise, which causes a leftward movement along the AD curve.
• E)The IA line shifts up, causing interest rates to rise, which causes the AD curve to shift to the left.

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Definitions:

Variable-Ratio

A reinforcement schedule where a response is reinforced after an unpredictable number of responses, promoting high and steady response rates.

Contingency

A future event or circumstance that is possible but cannot be predicted with certainty, often used in psychology to describe the relationship between behavior and its consequences.

DRO

Differential Reinforcement of Other behavior, a technique used in behavioral therapy to encourage the occurrence of desired behaviors by only rewarding behaviors other than the undesirable one.

Variable-Ratio

A reinforcement pattern in which a reaction is rewarded following a random number of responses, resulting in consistent and elevated rates of response.