An Increase in the Interest Rate Will

question 107

Multiple Choice

An increase in the interest rate will

• A)have no effect on investment,since investment is autonomous
• B)increase investment,since it will be more profitable to hold stocks and bonds
• C)increase investment,since people will be less willing to hold money
• D)decrease investment only if firms have to borrow money to make investments
• E)decrease investment regardless of whether firms have to borrow money to make an investment

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Definitions:

Observational Learning

The process of acquiring knowledge and skills by observing and imitating others.

Operant Conditioning

A method of learning that employs rewards and punishments for behavior, encouraging the subject to associate certain behaviors with consequences.

Classical Conditioning

A learning strategy in which two stimuli are continually paired; the response that is initially attracted by the second stimulus is in time attracted by the first stimulus alone.

Observational Learning

The act of acquiring behaviors through observation and replication of others.