An Increase in the Real Interest Rate Occurs When ________

question 20

Multiple Choice

An increase in the real interest rate occurs when ________.

• A)monetary policy responds automatically to an increase in inflation
• B)expected inflation increases,relative to the nominal interest rate
• C)an increase in autonomous spending causes an increase in equilibrium output
• D)all of the above
• E)none of the above

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Definitions:

Drive Balance

Refers to the equilibrium state or effort to balance different drives or motivations within an individual or organization, affecting decision-making and behavior.

Expectancy Theory

A motivational theory suggesting that individuals are motivated to perform if they believe their efforts will lead to desired performance and rewards.

Outcome Valences

The perceived desirability of the outcomes resulting from certain behaviors or decisions, influencing motivation and decision-making.

P-to-O Expectancy

The perceived probability that one's effort will lead to desired performance outcomes, often discussed in the context of motivation theories.