Suppose the Demand for Money Becomes Less Sensitive to Changes

question 124

Multiple Choice

Suppose the demand for money becomes less sensitive to changes in the interest rate.In moving along an LM curve,an increase in income must be accompanied by a ________ change in the interest rate than before,meaning that the LM curve has become ________.

• A)greater,steeper
• B)greater,flatter
• C)smaller,steeper
• D)smaller,flatter

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Definitions:

Systematic Desensitization

A behavioral therapy technique used to reduce phobic responses through gradual exposure to the feared object or situation paired with relaxation exercises.

Free Association

A psychoanalytic technique in which a patient says whatever comes to mind without censorship as a way of uncovering the unconscious mind.

Operant Conditioning

A method of learning that employs rewards and punishments for behavior, reinforcing certain behaviors and dissuading others.

Psychodynamic Therapy

A therapeutic approach emphasizing unconscious processes and past experiences affecting current behavior.