Open market operations are the tecniques used by the Federal Reserve, and other monetary authorities, to modify the money supply, in other words, to modify the amount of money in circulation in the economy.
These operations consist on either buying or selling government bonds, depending on whether the aim is to increase or decrease the money supply, respectively. These market operations affect interest rates, which function as the price of money.
- When buying bonds, the money paid for them is put into circulation. Therefore, if the amount of money in circulation increases, the price of money will react negatively and decrease. Interest rates will be lower, it will be cheaper to obtain funding and investing becomes less profitable. In this scenario, the money supply will boost.
- When selling bonds, the effects are exactly the oppostite. The supply of money decreases and interest rates go up.
Answer:
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Answer:
conditioned response.
Explanation:
Conditioned response: In psychology, the term conditioned response is a very important part of the classical conditioning theory or experiment. The theory was introduced by the psychologist Ivan Pavlov.
In classical conditioning, the term conditioned response is defined as a behavior that doesn't occur naturally and is being learned by organisms (animal or human beings) by associating a neutral stimulus with an unconditioned stimulus.
In the question above, the child's salivation to the sound of the can opener is a conditioned response.
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