In the Long Run, Any Demand-Side Policy That Attempts to Reduce

question 222

Multiple Choice

In the long run, any demand-side policy that attempts to reduce unemployment below its natural rate will

• A) cause inflation.
• B) be successful.
• C) increase the natural rate.
• D) lower GDP.

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Definitions:

Object Permanence

The knowledge that an object exists even when it is not in sight.

Piaget

A reference to Jean Piaget, a psychologist known for his work on child development and cognitive theory.

Conservation

In Piaget’s Theory the ability to understand that simply changing the appearance of an object does not change the object’s nature.

Climacteric

A phase in the aging process of humans during which there is a gradual decline in reproductive capacity and possibly the onset of other physiological changes.