Which of These Was a Lesson That Economists Learned from the Battle

question 26

Multiple Choice

Which of these was a lesson that economists learned from the battle with stagflation in the late 1970s and early 1980s?

• A)The money supply matters and has a very real impact on economic activity.
• B)Unemployment rates and inflation rates move in opposite directions.
• C)High inflation rates are more devastating to a society than high unemployment rates.
• D)Interest rates are more important than the money supply at a national level.

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Definitions:

Operant Conditioning

A method of learning that employs rewards and punishments for behavior.

Desirable Stimulus

A stimulus that is appealing and rewarding to an individual, prompting positive reactions.

Behavior

The actions or reactions of an object or organism, usually in relation to the environment or stimuli.

Operant-Conditioning Principles

A set of theories in behavioral psychology that posit behavior is shaped by its consequences, including reinforcement and punishment.