Suppose That the Money Multiplier Is 6

question 209

Multiple Choice

Suppose that the money multiplier is 6. If the monetary base increases by $1 million, the quantity of money will

• A) increase by $6 million.
• B) increase by $166,667.
• C) decrease by $166,667.
• D) decrease by $6 million.

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Definitions:

Stimulus Generalization

The tendency for the conditioned response to be evoked by stimuli that are similar to the stimulus that was originally conditioned.

Operant Conditioning

A method of learning that employs rewards and punishments for behavior, which leads to changes in behavior.

Extrinsic Rewards

Benefits and incentives provided by external factors, such as money, grades, or praise, which motivate behavior not inherently enjoyable.

Intrinsic Rewards

Internal satisfaction or fulfillment derived from engaging in an activity, without external incentives.