If the Income Elasticity of Money Demand Is Less Than

question 3

Multiple Choice

If the income elasticity of money demand is less than 1, then

• A)the income velocity of money will increase as the level of income increases
• B)the income velocity of money will decrease as the level of income increases
• C) the income velocity of money will remain constant over time
• D) the income velocity of money will increase with an increase in money demand
• E)an increase in income is always less than the resulting increase in money demand

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Definitions:

Negative Reinforcer

A stimulus whose removal or avoidance following a behavior increases the frequency of that behavior in the future.

Electric Shock

A sudden discharge of electricity through a part of the body, causing a sharp and often painful reaction.

Spanking

A form of physical punishment involving striking the buttocks of another person to cause temporary pain, often used as a disciplinary measure.

Law Of Effect

A psychological rule that suggests actions leading to rewarding outcomes are more likely to recur, whereas actions that result in negative outcomes are less likely to be repeated.