Suppose Your Bank Raises Its Minimum-Balance Requirement for Free Checking

question 34

Multiple Choice

Suppose your bank raises its minimum-balance requirement for free checking on checking accounts by $500.You take $500 out of your passbook savings account and put it in your checking account.What is the overall effect on M1 and M2?

• A)M1 rises by $500, M2 falls by $500.
• B)M1 is unchanged, M2 is unchanged.
• C)M1 rises by $500, M2 is unchanged.
• D)M1 is unchanged, M2 falls by $500.

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Definitions:

Behavior Change

The transformation or modification of human behavior using various psychological methods, including conditioning.

Sequence Effects

The impact that the order of presenting treatments or stimuli has on the subject's behavior or responses in an experiment.

AB Design

The most basic method for graphing behavioral observations. The designation AB refers to the two phases of the design: (1) the A, or baseline, phase, and (2) the B, or intervention, phase. During the A phase, baseline data are collected and recorded. After a stable baseline trend has been established, a vertical line is drawn, and then the intervention is introduced, which signifies the beginning of the B phase. In this phase, intervention data are collected and recorded. The teacher can evaluate the effectiveness of the intervention by comparing the data trend during the B phase to the behavioral observations collected during the A phase. A problem with this design is that it is impossible to rule out alternative explanations for behavior change during the B phase.

Graphing Behavior

The process of visually representing data from behavioral observations over time to analyze trends, patterns, or changes.