The Federal Reserve Cannot Consistently Keep the Federal Funds Rate

question 36

True/False

The Federal Reserve cannot consistently keep the federal funds rate below discount rate.

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Definitions:

Primary Reinforcer

An innate reinforcing stimulus like nourishment or shelter, which does not require learning to be effective in enhancing behavior.

Conditioning

A process of behavior modification by which a subject comes to associate a desired behavior with a previously unrelated stimulus.

Negative Contrast Effects

A psychological phenomenon where an individual's perception of an option is negatively influenced by a comparison with a better option.

Reinforcement

A process in operant conditioning that increases the likelihood of a behavior being repeated, which can be either positive (by adding a stimulus) or negative (by removing a stimulus).