Regarding central bank independence
A) the Fed is more independent than the European Central Bank.
B) the European Central Bank is more independent than the Fed.
C) the trend in industrialized nations has been to reduce central bank independence.
D) the Bank of England has the longest tradition of independence of any central bank in the world.
B
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Empirical studies find that exchange rates are much more variable than inflation differentials. How can we explain this empirical result?
What will be an ideal response?
According to rational expectations theory,
A) increasing the money supply to reduce unemployment will always be successful. B) decreasing the money supply to reduce unemployment will usually be successful. C) increasing the money supply to reduce unemployment will not be successful because of an offsetting decrease in prices. D) increasing the money supply to reduce unemployment will not be successful because of an offsetting increase in prices.
If the United States goes into a recession, this tends to shift Japan's AD curve _______________ because Japan will ___________________
A) rightward; import less from the United States B) rightward; export less to the United States C) leftward; import less from the United States D) leftward; export less to the United States
A firm with no competition faces a perfectly inelastic demand curve.
a. true b. false