Use the Following Phillips Curve Equation to Answer This Question

question 23

Multiple Choice

Use the following Phillips curve equation to answer this question: nt - nt- 1 = (m + z) - aut. Which of the following will cause a decrease in the natural rate of unemployment?

• A) A decrease in m.
• B) A decrease in expected inflation.
• C) An increase in z.
• D) A decrease in actual inflation.
• E) A decrease in a.

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Definitions:

Group Polarisation

Describes the tendency of a group to make decisions that are more extreme than the initial inclination of its members, often leading to riskier or more conservative positions.

Prejudice

Preconceived opinion or bias against an individual or group without adequate knowledge, reason, or experience, often based on stereotypes.

Stereotype

A widely held but fixed and oversimplified image or idea of a particular type of person or thing.

Physical Appearance

The outward characteristics or look of a person or object, including features such as shape, color, and form.