According to the Phillips Curve, If Current Output Is Above

question 135

Multiple Choice

According to the Phillips curve, if current output is above potential output:

• A) inflation falls.
• B) inflation rises.
• C) unemployment falls.
• D) inflation is constant.
• E) tax rates rise.

Identify and explain the phenomenon of decision fatigue and its consequences.

Describe group polarization and its effects on group decisions.

Understand the symptoms and consequences of groupthink.

Recognize the process and effects of escalation of commitment in decision-making.

---

Definitions:

Interest Rate

The rate at which a borrower pays interest for the money borrowed from a lender.

Loanable Funds

The total funds available for borrowing in the economy, coming from savings, that are used for investments and consumption.

Interest Rate

The fraction of a loan incurred as interest by the borrower, often depicted as an annual percentage of the outstanding loan amount.

Capital Flight

The rapid movement of large sums of money out of a country, typically to escape economic instability or unfavorable investment conditions.