Which of the Following Is a Reason That the Fed

question 217

Multiple Choice

Which of the following is a reason that the Fed does not traditionally attempt to limit asset price bubbles?

• A)The Fed's actions could do more harm than good.
• B)It is nearly impossible to determine if a bubble exists before it bursts.
• C)The Fed's policies cannot be targeted at only one sector of the economy.
• D)all of the above

---

Definitions:

Instinctive Drift

The inclination of an animal to return to innate behaviors that disrupt a learned response.

Sensory Adaptation

The adaptation process of sensory receptors becoming duller in response to stimuli that stays the same over time.

Stimulus Generalization

The process by which a response originally elicited by a specific stimulus is elicited by similar stimuli.

Spontaneous Recovery

The reappearance of a previously extinguished response after a period of no exposure to the conditioned stimulus.