Gladys Agrees to Lend Kay $1,000 for One Year at a Nominal

question 147

Multiple Choice

Gladys agrees to lend Kay $1,000 for one year at a nominal rate of interest of 5 percent.At the end of the year prices have actually risen by 7 percent.

• A)Gladys earns extra real income.
• B)Kay loses extra real income.
• C)Kay receives extra real income.
• D)Neither party gains or loses if the loan is repaid.

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Definitions:

Response

A reaction to a specific stimulus or situation.

Consequence

A result or effect of an action or condition, significant in many aspects of psychology and behavior analysis.

Disruptive Behaviors

Actions that interrupt the normal flow or processes of events in social or educational settings.

Operant Conditioning

A method of learning that occurs through rewards and punishments for behavior, thereby encouraging or discouraging certain actions.