Monetary Policy in Highland

question 322

Multiple Choice

Monetary Policy in Highland
Highland has had inflation of 15% for many years. Highland establishes a new central bank, the Bank of Highland, with the hopes of reducing the inflation rate.
-Refer to Monetary Policy in Highland. The Bank of Highland publicizes that it intends to reduce the inflation rate to 5%. If it is successful in doing so but people had expected inflation to fall only to 10%, then

• A)unemployment rises but it would have risen by more if people had expected inflation to be 6%.
• B)unemployment rises but it would have risen by less if people had expected inflation to be 6%.
• C)unemployment falls but it would have fallen by more if people had expected inflation to be 6%.
• D)unemployment falls but it would have fallen by less if people had expected inflation to be 6%.

---

Definitions:

Conscious Awareness

The state of being mentally alert and having an active awareness of thoughts, feelings, sensations, and surroundings.

Oedipus Complex

An idea in the realm of psychoanalytic theory that denotes an unconscious sexual longing a child feels for their parent of the opposite sex, alongside feelings of jealousy towards their parent of the same sex.

Penis Envy

A term from Freudian psychoanalysis referring to a girl's supposed feelings of envy towards males for having a penis, seen as a critical phase in female psychosexual development.

Phallic Stage

A phase in Freudian psychosexual development, occurring from about ages 3 to 6, where the child's libido centers upon their genitalia as the erogenous zone.