Leading to the Collapse of the Housing Bubble, Inflated Home

question 79

Multiple Choice

Leading to the collapse of the housing bubble, inflated home values created a(n) :

• A) increase in aggregate supply, which decreased the overall price level.
• B) increased sense of wealth, which increased aggregate demand.
• C) decreased sense of wealth, which decreased aggregate demand.
• D) decrease in aggregate supply, which caused inflation.

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Definitions:

Extinction

In behavioral psychology, the gradual weakening and eventual disappearance of a conditioned response.

Stimulus Generalization

The psychological phenomenon where a response to a specific stimulus becomes triggered by stimuli that are similar in nature.

Conditioned Response

The learned response to a previously neutral stimulus that has become associated with an unconditioned stimulus through classical conditioning.

Conditioned Stimulus

A previously neutral stimulus that, after association with an unconditioned stimulus, comes to trigger a conditioned response.