Because Prices Are Slow to Move in the Short-Run, When

question 1

Multiple Choice

Because prices are slow to move in the short-run, when the Bank of Canada lowers the overnight rate, ________.

• A) nominal interest rates rise
• B) real interest rates fall
• C) inflation falls
• D) real interest rates rise

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Definitions:

Aversive Stimuli

Stimuli that an organism seeks to avoid due to their unpleasant nature, often used in conditioning and behavioral studies.

Respondent Behavior

Behavior that occurs as an automatic response to a specific stimulus, often without conscious intention, as studied in classical conditioning.

Operant Behavior

Behavior that is controlled by its consequences, including rewards and punishments, in the context of operant conditioning.

Functional Analysis

In behaviorism, a description of how a behavior is a function of the environment of the person or animal that performs it.