Scenario 35-2 ​

question 84

Multiple Choice

Scenario 35-2
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In Flosserland, the Department of Finance is responsible for monetary policy. Flosserland has had an inflation rate of 25% for many years.
-Refer to Scenario 35-2. Suppose that the Flosserland Department of Finance has run a public relations campaign claiming it will reduce inflation to 12.5% but that it actually leaves inflation at 25%. Suppose that the public had expected that the Department of Finance would reduce inflation, but only to 20%. Then

• A)unemployment falls, but it would have fallen more if people had been expecting 12.5% inflation.
• B)unemployment falls, but it would have fallen more if people had been expecting 22% inflation.
• C)unemployment rises, but it would have risen more if people had been expecting 12.5% inflation.
• D)unemployment rises, but it would have risen more if people had been expecting 22% inflation.

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Definitions:

Biased Language

Language that reflects a prejudgment or partiality towards a certain viewpoint or group.

Goodwill

The positive reputation and supportive relationship a business or individual possesses, often considered as an intangible asset.

Organization

The structured arrangement or coordination of activities and resources in a group or entity to achieve specific goals.

Hard Copy

A physical version of a document, as opposed to a digital or electronic version.