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Use the information below to explain adjustments that move the economy to a long-run equilibrium.Assume that firms and workers have adaptive expectations.
The current unemployment rate = 4%.
The natural rate of unemployment = 6%.
Last year's inflation rate = 3%.
This year's inflation rate = 4%.
Autonomous Interdependence
A state in relationships where individuals maintain their independence while also valuing and relying on connections with others.
Egocentric
A cognitive trait where an individual is unable to understand or assume the perspective of others, typically seen in early childhood development.
Perspective-taking Skills
The capacity to understand and interpret another person's thoughts, feelings, and viewpoints, distinct for its relevance across various social contexts.
Robert Selman
A psychologist known for his work on the development of social cognition in children and adolescents, including theories of perspective-taking.
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