Probably the Most Significant Implication of the Natural Rate of Unemployment

question 67

Multiple Choice

Probably the most significant implication of the natural rate of unemployment hypothesis is that

• A)the natural rate of inflation tends toward zero
• B)long-run policy should be directed toward controlling inflation rather than unemployment
• C)the natural rate of unemployment can be reduced by accepting worsening inflation
• D)the natural rate of unemployment is consistent only with a zero inflation rate in the long run
• E)tax cuts stimulate the economy and lower inflation

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Definitions:

Experience Dissonance

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

Induced Compliance

A psychological phenomenon where individuals change their attitudes or beliefs to align with their externally influenced behaviors, especially in situations causing cognitive dissonance.

Dissonance Reduction

A psychological process by which individuals reduce the discomfort (dissonance) caused by conflicting beliefs, values, or attitudes, often by changing or rationalizing them.

Counterattitudinal Behavior

Engaging in behavior that is inconsistent with one's beliefs, attitudes, or values.