What Is the Long-Run Effect of a Decrease in Expected

question 41

Multiple Choice

What is the long-run effect of a decrease in expected inflation predicted by the Phillips curve model?

• A) lower inflation, but no change in unemployment
• B) lower inflation and lower output
• C) higher inflation and higher unemployment
• D) no change in inflation, but higher unemployment

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Definitions:

Systematically Desensitizing

A therapeutic technique used to reduce fear or anxiety towards a particular object or situation by gradually exposing the subject to the object or situation in a controlled manner.

Test Anxiety

A psychological condition in which individuals experience extreme distress and anxiety in testing situations, potentially impairing their performance.

Token Economy

An operant conditioning procedure in which people earn a token of some sort for exhibiting a desired behavior and can later exchange the tokens for various privileges or treats.

Operant Conditioning

A learning process in which behaviors are influenced by consequences like rewards or punishments.