Each of the Following Conditions Will Tend to Reduce the Sacrifice

question 49

Multiple Choice

Each of the following conditions will tend to reduce the sacrifice ratio except when:

• A) workers and firms set wages and prices based on rational expectations.
• B) policymakers make credible commitments to policy changes.
• C) announcements of policy changes are made before workers and firms have formed expectations.
• D) the concept of hysteresis accurately describes the impact of history on the natural rate of unemployment.

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Definitions:

Roentgen Diagnosis

The use of X-rays to diagnose diseases or abnormalities within the body, named after Wilhelm Roentgen who discovered X-rays.

Roentgen Therapy

A form of radiation therapy using X-rays for treating diseases, named after physicist Wilhelm Röntgen.

Ionization

The method through which an atom or molecule obtains a positive or negative charge by the addition or removal of electrons.

Substance

material with particular physical characteristics, an important concept in chemistry and physics.