Under Adaptive Expectations Theory, an Increase in the Short-Run Aggregate

question 7

Multiple Choice

Under adaptive expectations theory, an increase in the short-run aggregate demand curve ____ the inflation rate and ____ the unemployment rate.

• A) increases; increases
• B) increases; decreases
• C) increases; does not change
• D) decreases; increases

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Definitions:

Avoidance Conditioning

A learning process through which a subject learns to avoid an unpleasant or harmful stimulus by engaging in particular behaviors.

Passive Avoidance

A learning process in which an individual learns to avoid a stimulus or situation after experiencing or anticipating an unpleasant outcome.

Two-Way Avoidance

A learning process in which an animal or human learns to avoid a negative stimulus by performing a particular behavior.

Unpleasant Situation

A scenario or condition that is not enjoyable or is likely to cause discomfort, distress, or dissatisfaction.