Use the Figure Below to Answer the Following Question(s)

question 119

Multiple Choice

Use the figure below to answer the following question(s) .
Figure 14-2
-If the Fed anticipates that the conditions illustrated by AD₂ and SRAS in Figure 14-2 will be present in the near future, it should

• A)decrease the discount rate.
• B)reduce reserve requirements.
• C)sell U.S.treasury bonds on the open market.
• D)buy U.S.treasury bonds on the open market.

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Definitions:

Reinforcement

A psychological principle that involves using consequences to strengthen a behavior, making it more likely to occur in the future.

Classical Conditioning

An instructive method involving the repeated pairing of two stimuli; a response, initially elicited by the second stimulus, is in time elicited by the first stimulus independently.

Operant Conditioning

A method of learning where behavior alteration occurs through the application of incentives or consequences.

Associate

To connect or link in one's mind, often referring to the process of forming mental connections between ideas, objects, or experiences.