If People Have Adaptive Expectations, the Phillips Curve Model Implies

question 16

Multiple Choice

If people have adaptive expectations, the Phillips curve model implies that whenever the actual rate of inflation is higher than the expected rate of inflation:

• A)​unemployment will exceed its natural rate.
• B)​unemployment will be less than its natural rate.
• C)​unemployment will increase.
• D)​unemployment will decrease.

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Definitions:

Latent Learning

Learning that occurs without any obvious conditioning or immediate display of behavior and manifests later when suitable.

Extinction

In psychology, the gradual weakening of a conditioned response that results in the behavior decreasing or disappearing.

Generalization

The ability to apply the lessons learned from specific instances to broader, similar situations without being explicitly taught for every situation.

Positive Reinforcement

A process in behavior analysis where the probability of a behavior occurring is increased by following it with the addition of a reinforcing stimulus.