Refer to Figure 18

question 60

Multiple Choice

Refer to Figure 18.2.The sale of bonds by the Fed in the open market will result in

• A)A decrease in the money supply and a move from AD₂ to AD₁.
• B)An increase in the money supply and a move from AD₁ to AD₂.
• C)A decrease in the money supply and a move from AS₂ to AS₁.
• D)An increase in the money supply and a move from AS₁ to AS₂.

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Definitions:

Instrumentality

In expectancy theory, the belief that a certain level of performance will lead to a specific outcome or reward.

Effort

The amount of energy, work, or concentration applied towards a task or goal.

Valence

In psychology and motivational theory, the degree of attractiveness or aversiveness an outcome holds for a person, influencing their motivation levels.

Valence

The value or importance an individual places on the expected outcome of a particular behavior or action.