The Fed Raises the Interest Rate When It

question 75

Multiple Choice

The Fed raises the interest rate when it

• A)fears recession.
• B)wants to increase the quantity of money.
• C)fears inflation.
• D)wants to encourage bank lending.
• E)cannot change the quantity of money.

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Definitions:

Unconditioned Stimulus

A stimulus that instinctively and automatically provokes a reaction without needing any beforehand learning.

Insight Learning

A form of problem solving that occurs when a solution to a problem suddenly becomes apparent, often without trial-and-error behavior.

Law of Effect

A principle of learning that states behaviors followed by positive outcomes will be repeated, while those followed by negative outcomes will not.

Negative Reinforcement

A process in behavioral psychology where the removal of an unpleasant stimulus strengthens or increases the likelihood of a response.