In the Short Run, an Increase in Inflation Initiated by the Reserve

question 6

Multiple Choice

In the short run, an increase in inflation initiated by the Reserve Bank and not matched by an increase in the expected inflation rate results in ________ in the long-run Phillips curve and ________ in the short-run Phillips curve.

• A) a rightward shift; a downward shift
• B) a rightward shift; an upward shift
• C) no change; a downward shift
• D) no change; no change
• E) a leftward shift; an upward shift

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Definitions:

Recency Effect

The tendency to remember the most recently presented information best, often seen in studies of memory and cognition.

Chunking Effect

Chunking Effect is the cognitive process of breaking down complex information into smaller, manageable units (or chunks) to improve memory and recall.

Primacy Effect

The tendency to remember information at the beginning of a list better than information that comes later.

False Positives

Occurrences where a test incorrectly indicates the presence of a condition or attribute.