In the Short Run, Which of the Following Is the Most

question 186

Multiple Choice

In the short run, which of the following is the most likely effect of an unanticipated move to expansionary monetary policy?

• A) an increase in real output
• B) a decrease in real output
• C) an improvement in technology, which will stimulate growth in the long run
• D) an increase in prices proportional to the increase in the money supply

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Definitions:

Just-World Phenomenon

The Just-World Phenomenon is a cognitive bias wherein individuals believe that the world is inherently fair, leading them to rationalize others' suffering as deserved due to their actions.

Scapegoating

The practice of singling out one person or group for unmerited blame and hostility.

Other-Race Effect

An inclination to more effortlessly discern faces of the race one is predominantly exposed to, generally one's own race.

Hindsight Bias

The tendency to believe, after an event has occurred, that one would have predicted or expected the outcome, often referred to as the "I-knew-it-all-along" effect.