If Wages and Prices Adjust Slowly,we Would Expect Expansionary Monetary

question 186

Multiple Choice

If wages and prices adjust slowly,we would expect expansionary monetary policy to be

• A)less likely to reduce the natural unemployment rate.
• B)more likely to reduce inflation.
• C)more likely to affect the unemployment rate.
• D)more likely to result in a vertical short-run Phillips curve.

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Definitions:

Conditioned Stimulus

A previously neutral stimulus that, after being associated with an unconditioned stimulus, elicits a conditioned response.

Unconditioned Stimulus

In classical conditioning, a stimulus that naturally and automatically triggers a response without prior learning or association.

Unconditioned Response

An automatic, natural reaction to a stimulus that occurs without prior learning or conditioning.

Conditioned Stimulus

In classical conditioning, a previously neutral stimulus that, after being repeatedly paired with an unconditioned stimulus, triggers a conditioned response.