What Does a Higher Interest Rate Induce People to Do

question 56

Multiple Choice

What does a higher interest rate induce people to do?

• A) save more, so the supply of loanable funds slopes upward
• B) save less, so the supply of loanable funds slopes downward
• C) invest more, so the supply of loanable funds slopes upward
• D) invest less, so the supply of loanable funds slopes downward

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Definitions:

Bandura

Albert Bandura, a psychologist renowned for his work on social learning theory, emphasizing the role of observational learning, imitation, and modeling in behavior.

Higher-order Conditioning

A form of learning where a stimulus is first made meaningful or potent through its association with a primary stimulus.

Emotional Responses

The physical and psychological reactions that are triggered by an emotional event or stimulus.

Negative Reinforcement

A method in operant conditioning where an adverse condition is removed or avoided following a desired behavior, thereby strengthening that behavior.