When the Value of the Dollar Increases, the Net Effect

question 62

Multiple Choice

When the value of the dollar increases, the net effect on the economy

• A) will be an increase in short-run aggregate supply and a decrease in aggregate demand.
• B) will be decrease in short-run aggregate supply and an increase in aggregate demand.
• C) will be an increase in both aggregate demand and aggregate supply.
• D) will be a decrease in both aggregate demand and aggregate supply.

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Definitions:

Behavioral Contrast

The change in the intensity or rate of a specific behavior when the reward conditions for another behavior are modified, demonstrating how reinforcement can influence behavioral patterns divergently.

Habituation

The process by which there is a decrease in response to a stimulus after repeated exposures, indicating a form of learning or adaptation.

Sensitization

An increased response to a stimulus following repeated exposures, typically leading to an exaggerated reaction over time.

Behavioral Contrast

A phenomenon in which the rate of a behavior varies inversely with an alteration in the conditions of reinforcement for another behavior.