If Businesses Are Producing at Capacity, and the Nation Is

question 39

Multiple Choice

If businesses are producing at capacity, and the nation is experiencing almost full employment (a very low rate of unemployment-less than 2%) , the Fed may decide to

• A) lower interest rates.
• B) raise taxes.
• C) lower taxes.
• D) increase interest rates.

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Definitions:

Neutral Stimulus

A stimulus that initially produces no specific response other than focusing attention, until it is associated with an unconditioned stimulus.

Unconditioned Stimulus

In classical conditioning, a stimulus that unconditionally—naturally and automatically—triggers a response without any learning needed.

Behaviorism

An approach to psychology that emphasizes the study of observable behavior and the role of the environment and prior experience as determinants of behavior.

Psychoanalysis

A therapeutic approach founded by Sigmund Freud, focusing on unconscious processes and childhood experiences.