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If Expectations Are Adaptive,how Will the Economy Adjust to a New

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Essay

If expectations are adaptive,how will the economy adjust to a new long-run equilibrium in response to expansionary monetary policy? Support your answer with a graph of the Phillips curve.


Definitions:

Metacognition

The awareness and understanding of one’s own thought processes, involving self-regulation of cognition through planning, monitoring, and evaluation.

Mental Retardation

An outdated and offensive term formerly used to describe individuals with significantly below-average intellectual functioning and adaptive behaviors; the preferred term is intellectual disability.

Autism

A developmental disorder characterized by difficulties with social interaction and communication, and by restricted and repetitive behavior.

Information-Processing Approach

A cognitive psychology perspective emphasizing the way people focus on, manipulate, store, and retrieve information.

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