What Is the Name of the One-For-One Adjustment of the Nominal

question 19

Multiple Choice

What is the name of the one-for-one adjustment of the nominal interest rate to the inflation rate?

• A) the Keynes effect
• B) the Hume effect
• C) the Fisher effect
• D) the Ricardian equivalence effect

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Definitions:

Self-Serving Bias

A cognitive bias where individuals attribute positive outcomes to their own actions but negative outcomes to external factors.

System 2

A term often associated with dual-process theories of mind, representing the analytical, deliberate, and logical mode of thinking.

Framing Effects

Cognitive biases where people's decisions are influenced by the way information is presented, rather than just the information itself.

Anchoring

Anchoring is a psychological phenomenon wherein an individual relies too heavily on an initial piece of information, or 'anchor,' to make subsequent decisions.