Pure Inflation Occurs When

question 27

Multiple Choice

Pure inflation occurs when

• A)nominal wages rise faster than all prices.
• B)all prices rise faster than nominal wages.
• C)all prices and nominal wages rise by the same percentage.
• D)the GDP deflator and Consumer Price Index rise by the same percentage.
• E) none of the above

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Definitions:

Chameleon Effect

The unconscious mimicry of the postures, mannerisms, facial expressions, and other behaviors of one's interaction partners.

Groupthink

The mode of thinking that occurs when the desire for harmony in a decision-making group overrides a realistic appraisal of alternatives.

Normative Social Influence

The influence of other people that leads us to conform in order to be liked and accepted by them.

Informational Social Influence

The process of changing one's behavior to match the responses of others, believing that their interpretation of an ambiguous situation is more correct.