When the Fed Sells Treasury Bonds on the Open Market

question 50

Multiple Choice

When the Fed sells Treasury Bonds on the open market, it will tend to

• A) decrease the money supply and raise interest rates.
• B) decrease the money supply and lower interest rates.
• C) increase the money supply and raise interest rates.
• D) increase the money supply and lower interest rates.

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Definitions:

Behaviorism

A theory of learning which states that all behaviors are acquired through conditioning processes influenced by the environment, without the need for internal thoughts or feelings.

Psychoanalysis

A therapeutic approach and theory of psychotherapy developed by Sigmund Freud that emphasizes the role of unconscious factors in driving human behavior.

Freud

Sigmund Freud was a neurologist and the founder of psychoanalysis, a method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Observable Behavior

Actions or reactions of an individual in various situations that are visible and measurable, often used in behavioral psychology for analysis.