Which of the Following Sequence of Events Follows an Open

question 195

Multiple Choice

Which of the following sequence of events follows an open market purchase by the Fed?

• A) r↑ ⇒ I↓ ⇒ AE↓ ⇒ Y↓
• B) r↑ ⇒ I↑ ⇒ AE↓ ⇒ Y↑
• C) r↓ ⇒ I↑ ⇒ AE↑ ⇒ Y↑
• D) r↓ ⇒ I↓ ⇒ AE↓ ⇒ Y↓

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Definitions:

Paid

Receiving money or other forms of compensation in exchange for goods provided or services rendered.

Operant Conditioning

A method of learning that employs rewards and punishments for behavior, emphasizing the effects of consequences on behavior modification.

Extinction

In psychology, the process through which a conditioned response decreases in frequency and eventually disappears.

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