From an Initial Long-Run Macroeconomic Equilibrium, If the Reserve Bank

question 53

Multiple Choice

From an initial long-run macroeconomic equilibrium, if the Reserve Bank of Australia anticipated that next year aggregate demand would grow significantly slower than long-run aggregate supply, then the RBA would most likely:

• A)increase income tax rates.
• B)decrease income tax rates.
• C)increase interest rates.
• D)decrease interest rates.

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Definitions:

Peripheral Route Persuasion

A method of persuasion that relies on superficial cues or associations, rather than logical argument, to influence someone's attitude or behavior.

Dispositional Attributions

The inclination to assign the cause of a behavior or event to an individual's innate characteristics rather than to external factors.

Foot-In-The-Door Phenomenon

The tendency for people to agree to a large request after first agreeing to a small one.

Cognitive Dissonance

The psychological discomfort experienced when holding two or more conflicting beliefs, values, or attitudes.