The Federal Reserve Can Increase Aggregate Demand by

question 260

Multiple Choice

The Federal Reserve can increase aggregate demand by

• A) reducing the money supply.
• B) reducing the discount rate.
• C) raising the reserve requirement.
• D) selling government securities in the open market.

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Definitions:

Classical Conditioning

A training mechanism in which two stimuli are frequently paired together; over time, the response that was originally caused by the second stimulus is elicited by the first stimulus.

Unconditioned Response

A reflexive, instinctual reaction to an unconditioned stimulus, not learned through previous experience.

Conditioned Response

A learned reaction to a conditioned stimulus that occurs because of previous conditioning, an essential concept in classical conditioning theories.

Unconditioned Stimulus

A stimulus that naturally and automatically triggers a response without any prior learning.