-In the Figure Above, What Happens If the Fed Increases

question 101

Multiple Choice

-In the figure above, what happens if the Fed increases the quantity of money by 8 percent?

• A) The LRMD curve shifts rightward to restore equilibrium.
• B) The value of money falls to 0.92 and there is a movement downward along the LRMD.
• C) The price level falls to 1.08.
• D) The interest rate rises to 1.08.
• E) The value of money rises to 1.08.

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Definitions:

Behavior Modification

A therapy approach aimed at changing undesired behaviors through reinforcement, punishment, and other learning principles.

Modeling

A method used in various contexts, including psychology, whereby learning occurs through the observation and replication of behaviors.

Exposure Therapy

A psychological treatment that helps individuals confront their fears by gradual, controlled exposure to the feared object or context without any danger.

Classical Conditioning

The process of learning through the repeated pairing of two stimuli, leading to a situation where a response originally produced by the latter stimulus is later evoked by the former stimulus alone.