Monetary Policy in Mokania

question 48

Multiple Choice

Monetary Policy in Mokania
Mokania has had inflation of 15% for many years. Mokania establishes a new central bank, the Bank of Mokania, with the hopes of reducing the inflation rate.

-Refer to Monetary Policy in Mokania.The Bank of Mokania publicizes that it intends to reduce the inflation rate to 5%.If it actually reduces inflation to 3% and people were expecting inflation to fall only to 8%,then

• A)unemployment falls but it would have fallen by more if the Bank of Mokania had reduced inflation to 5% rather than 3%.
• B)unemployment falls but it would have fallen by less if the Bank of Mokania had reduced inflation to 5% rather than 3%.
• C)unemployment rises but it would have risen by more if the Bank of Mokania had reduced inflation to 5% rather than 3%.
• D)unemployment rises but it would have risen by less if the Bank of Mokania had reduced inflation to 5% rather than 3%.

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Definitions:

Real Cigarette

A traditional cigarette made with tobacco as opposed to electronic or synthetic alternatives.

Experimenter Bias

A process where the scientists performing the research influence the results, intentionally or unintentionally, in a direction consistent with their hypothesis.

Researcher's Expectations

The preconceived ideas and hypotheses that a researcher holds about the outcomes of an experiment, which can unintentionally influence the results.

Study Influence

The impact that various factors, like study environment, mood, or method, have on the effectiveness of learning and information retention.