The Transaction Demand for Money

question 56

Multiple Choice

The transaction demand for money

• A)decreases when interest rates decrease below normal.
• B)increases when interest rates increase above normal.
• C)decreases when interest rates increase above normal.
• D)increases when the price level rises.

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Definitions:

Thorndike

Edward Thorndike, an American psychologist, who is famous for his work in the early 20th century on learning theory and the law of effect.

Behavior Modification

The application of operant-conditioning techniques to teach new responses or to reduce or eliminate maladaptive or problematic behavior; also called applied behavior analysis.

Puzzle Boxes

Experimental devices used in animal learning research, where an animal must solve a problem or manipulate mechanisms to escape or obtain a reward.

Thorndike

An American psychologist who developed the law of effect, which states that behaviors followed by positive outcomes are likely to be repeated, while those followed by negative outcomes are not.