When the RBA Uses Contractionary Policy

question 46

Multiple Choice

When the RBA uses contractionary policy:

• A)the price level rises by more than it would if the RBA did not pursue policy.
• B)the price level rises by less than it would if the RBA did not pursue policy.
• C)it does not change the price level.
• D)it causes inflation.

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Definitions:

Dog Blinking

A reflex or voluntary action in dogs to protect their eyes from foreign bodies or express emotions, not a widely recognized behavioral study term.

Law of Effect

Law stating that if an action is followed by a pleasurable consequence, it will tend to be repeated, and if followed by an unpleasant consequence, it will tend not to be repeated.

Thorndike

An American psychologist who developed the law of effect and is known for his work in learning theory and educational psychology.

Operant Conditioning

A type of learning where behavior is controlled by consequences, including rewards for positive actions and punishments for negative actions.