If the Fed Wishes to Stimulate Aggregate Demand, It Will

question 65

Multiple Choice

If the Fed wishes to stimulate aggregate demand, it will conduct an _____ which will _____ bond prices, _____ interest rates, and _____ investment.

• A)open market sale; lower; lower; stimulate
• B)open market purchase; lower; lower; discourage
• C)open market sale; lower; raise; discourage
• D)open market purchase; raise; lower; stimulate

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Definitions:

Aversive Conditioning

A form of behavioral training where a negative stimulus is associated with undesirable behaviors to reduce or eliminate those behaviors.

Cognitive Therapies

A group of psychotherapies that focus on changing maladaptive thinking patterns to improve emotional regulation and develop personal coping strategies.

Behavior Modification

Techniques or therapies applied to change undesirable behaviors by using the principles of learning theory.

Exposure Therapies

A technique in behavioral therapy aimed at reducing fear and anxiety responses by gradually exposing the patient to the feared object or context without any danger.