If Workers and Firms Have Rational Expectations,they Understand That ________

question 223

Multiple Choice

If workers and firms have rational expectations,they understand that ________ monetary policy will raise the inflation rate,so actual inflation ________ expected inflation.

• A)expansionary; will be equal to
• B)expansionary; will be greater than
• C)contractionary; will be equal to
• D)contractionary; will be less than
• E)expansionary; will be less than

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Definitions:

Deindividuation

A psychological state characterized by diminished self-consciousness, reduced social identity, and disinhibited behavior, often occurring in group settings.

Groupthink

A psychological phenomenon that occurs within a group of people when the desire for harmony or conformity in the group results in an irrational or dysfunctional decision-making outcome.

Self-Serving Bias

The common habit of a person taking credit for positive events or outcomes, but blaming outside factors for negative events.

Fundamental Attribution Error

The tendency to overemphasize personal characteristics and ignore situational factors when judging others' behavior.