Ceteris Paribus,if Average Prices in the U

question 91

Multiple Choice

Ceteris paribus,if average prices in the U.S.economy fall,then the

• A)Real balances effect will lead to a lower quantity of U.S.output demanded.
• B)Foreign trade effect will lead to a lower quantity of U.S.output demanded.
• C)Interest rate effect will lead to a higher quantity of U.S.output demanded.
• D)Cost effect will lead to a higher quantity of U.S.output demandeD.As the price level falls,interest rates fall,so spending on interest-sensitive items such as cars and plasma TVs increases.Even with a constant quantity of nominal money,interest rates fall because a decrease in the price level causes an increase in the supply of real money in a lending institution.

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Definitions:

Aversive Conditioning

A form of conditioning that uses unpleasant stimuli to induce a negative response to certain behaviors.

Unwanted Behavior

Actions or reactions that are not desired or considered inappropriate in a given context or societal norm.

Virtual Reality Exposure Therapy

Virtual Reality Exposure Therapy is a therapeutic technique that uses virtual reality technology to expose patients to stimuli related to their psychological issues in a controlled environment.

Systematic Desensitization

is a therapy technique used to help individuals overcome phobias and anxiety through gradual exposure to the feared object or situation.