The Federal Open Market Committee
a. by law must focus on maintaining low inflation rather than stabilizing output.
b. by law must focus on stabilizing output rather than maintaining low inflation.
c. by law must follow a mechanical rule that takes into account deviations of unemployment from its natural rate and deviations of inflation from a target.
d. operates with almost complete discretion over monetary policy.
d
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Assuming the central bank follows a money supply target, then an increase in the demand for money
a. will shift the position of the LM schedule away from the predicted level even if the target level of the money supply is achieved. b. will shift the position of the LM schedule toward the predicted level as long as the target level of the money supply is achieved. c. may or may not shift the position of the LM schedule away from the predicted level even if the target level of the money supply is achieved. d. None of the above
A trade deficit can produce inflation when a country and its trading partners are on the gold standard or a bi-metallic system
Indicate whether the statement is true or false
Another name for plurality voting is:
A. pair-wise majority voting. B. instant runoff voting. C. approval voting. D. first-past-the-post voting.
Suppose the actual and expected price levels in an economy are initially equal. However, the actual price level falls eventually due to a change in economic conditions. Which of the following will occur over the long run??
a. The economy will move rightward along the short-run aggregate supply curve.
b. The economy will move leftward along the short-run aggregate supply curve.
c. The short-run aggregate supply curve will shift to the right.
d. The short-run aggregate supply curve will shift to the left.
e. The short-run aggregate supply curve will become flatter.