If the Intersection of the IS Curve with the Horizontal

question 41

Multiple Choice

If the intersection of the IS curve with the horizontal axis comes at a level of output below the natural level of output,lowering interest rate to zero will

• A)bring economy back to natural output.
• B)not bring the economy back to natural output.
• C)will have inflationary effects on the economy.
• D)will cause saving rates to increase.

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Definitions:

Cognition

The intellectual activities or procedures used to gain understanding and knowledge by means of reasoning, experiencing, and perceiving with the senses.

Reinforcement Schedule

A pattern that defines how often a desired response will be reinforced.

Rats

Rodents often used in scientific research due to their physiological and genetic similarities to humans.

Biological Predisposed

Refers to a natural inclination or tendency in individuals to develop certain characteristics or disorders based on genetic factors.