If a Government Issues an Excessive Amount of Debt Then

question 54

Multiple Choice

If a government issues an excessive amount of debt then

• A) it doesn't matter because the national debt need never be paid back.
• B) the financial markets will perceive that the risk of the government concerned defaulting on its loans has risen and will demand a higher rate of interest to lend to that government.
• C) the financial markets will perceive an increased opportunity for profit and reduce the rate of interest demanded to lend to that government.
• D) other governments are likely to do the same.

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Definitions:

Target Response

The desired behavior or outcome that is aimed for in a psychological experiment or behavioral intervention.

Likelihood

The probability or chance that a particular event will occur.

Operant Process

The method by which behaviors are modified through the consequences of those behaviors, emphasizing reinforcement and punishment.

Negative Reinforcement

A concept in behavioral psychology where the removal of an unpleasant stimulus in response to a desired behavior increases the likelihood of that behavior being repeated in the future.