A Small Increase in the Real Interest Rate Will Most

question 61

Multiple Choice

A small increase in the real interest rate will most likely

• A)increase desired saving, but the effect will be relatively small.
• B)increase desired saving substantially.
• C)decrease desired saving substantially.
• D)decrease desired saving, but the effect will be relatively small.

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Definitions:

Proximal Stimulus

The stimulus registered by the sensory receptors (e.g., the pattern of light hitting the retina), as opposed to the actual object or event in the external world.

Information Processing

A cognitive approach that likens the mind to a computer, focusing on how people process, store, and retrieve information.

Compare

To examine two or more objects, ideas, or entities to identify similarities and differences between them.

Contrast Effects

The enhancement or reduction in perception and judgement of stimuli when compared to a recently encountered contrasting stimulus.