T Assume That Expected Inflation Is Based on N E

question 65

Multiple Choice

t Assume that expected inflation is based on n e = 8nt- 1. If 8 = 1, we know that:

• A) an increase in the unemployment rate will have no effect on inflation.
• B) a decrease in the unemployment rate will have no effect on inflation.
• C) the actual unemployment rate will not deviate from the natural rate of unemployment.
• D) low rates of unemployment will cause steadily increasing rates of inflation.
• E) the Phillips curve illustrates the relationship between the level of the inflation rate and the level of the unemployment rate.

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Definitions:

Second-Order Conditioning

A form of conditioning where a stimulus that's paired with a conditioned stimulus becomes a conditioned stimulus itself.

Classical Conditioning

A training method where two signals are consistently associated together, leading to a situation where a reaction originally triggered by the second signal is later triggered by the first signal on its own.

Negative Side Effects

Undesirable and harmful outcomes or reactions caused by medication, treatment, or intervention.

Punishment

A consequence imposed following undesirable behavior, intended to decrease the likelihood of that behavior occurring again.