Which Policy Would Cause a Reduction in Both Excess Bank

question 4

Multiple Choice

Which policy would cause a reduction in both excess bank reserves and aggregate demand?

• A) a reduction in the discount rate
• B) the Federal Reserve purchasing government securities in the open market
• C) a reduction in taxes
• D) an increase in the reserve requirement

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Definitions:

Opponent Process Theory

Proposes that emotions are regulated by mechanisms that operate in opposition to each other, restoring emotional balance after disturbances.

Addiction

An ongoing, recurrent illness marked by an uncontainable desire for drug consumption, consistent usage in spite of detrimental outcomes, and permanent shifts in brain structure.

Manic-Depressive Psychosis

An older term for bipolar disorder, characterized by extreme mood swings between mania and depression.

Opponent Process Model

A psychological and neurological model that explains a wide range of behaviors, including color vision and emotions, by proposing that elements in the visual system or emotional reactions operate in opposing pairs.