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A little boy is staying home alone for the first time when a tree branch falls onto the roof. He makes a perceptual error, concluding that the noise is a burglar breaking into his house. Describe the way he might have experienced this event, moving through the three stages of the perceptual process.
Deflation
A decrease in the general price level of goods and services, often indicating a contraction in the economy.
Misery Index
An economic indicator created by adding the unemployment rate to the inflation rate, proposing to reflect the average citizen's financial discomfort.
Nominal Interest Rate
The rate of interest before adjusting for inflation, representing the face value of interest payments.
Inflation
The speed at which the overall price level for goods and services increases, causing a decline in the value of money.
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