If the Public Correctly Perceives That the Central Bank Will

question 57

Multiple Choice

If the public correctly perceives that the central bank will reduce inflation, then the short-run Phillips curve shifts

• A)right, and unemployment will rise by more than otherwise.
• B)right, and unemployment will rise by less than otherwise.
• C)left, and unemployment will rise by more than otherwise.
• D)left, and unemployment will rise by less than otherwise.

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Definitions:

Accentuation Principle

Categorization accentuates perceived similarities within and differences between groups on dimensions that people believe are correlated with the categorization. The effect is amplified where the categorization and/or dimension has subjective importance, relevance, or value.

Human Attribute

Characteristics, traits, or qualities that define or are inherent in humans, contributing to individual identities and behaviors.

Accentuation Effect

A cognitive bias that emphasizes the differences between categories or groups of people more than they actually exist.

Categorisation

The process of grouping items or information based on shared characteristics or qualities.