In Case of Business Cycles, If Output Falls Below the Trend

question 56

Multiple Choice

In case of business cycles, if output falls below the trend line

• A)unemployment and inflation both rise.
• B)unemployment and inflation both fall.
• C)unemployment rises and inflation falls.
• D)unemployment falls and inflation rises.

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Definitions:

Cognitive Dissonance

A psychological phenomenon where there is a conflict between one's beliefs and behaviors, causing discomfort that leads to an attempt to change beliefs or behaviors to reduce the dissonance.

Balance

The ability to maintain bodily equilibrium or stability through the coordination of sensory functions and motor control.

Self-Perception Theory

A theory that suggests individuals develop their attitudes by observing their own behavior and concluding what attitudes must have caused them.

Cooperative Behaviour

Actions by individuals that are intended to benefit or assist others within a group, contributing to the group's overall success or well-being.