According to the Aggregate Expenditure Model, When Faced with Unwanted

question 151

Multiple Choice

According to the aggregate expenditure model, when faced with unwanted inventory firms

• A) are forced to go out of business.
• B) decrease production.
• C) immediately cut prices.
• D) increase production.
• E) do nothing and wait for equilibrium to be restored.

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Definitions:

Punishment

A process in which a consequence immediately follows a behavior, decreasing the likelihood that the behavior will be repeated.

Operant Responding

A behavior modification process through which the strength of a behavior is modified by reinforcement or punishment.

Negative Reinforcement

A behavioral concept where the removal of an adverse stimulus strengthens a behavior or increases its likelihood of being repeated.

Operant Conditioning

A process of instruction where behaviors are adjusted by the application of reinforcements or deterrents.