An economist advising a central bank intending to reduce the inflation rate would likely point out that
a. the costs of reducing inflation persist and the costs of reducing it do not depend on the public's inflation expectations.
b. the costs of reducing inflation persist, but they are smaller if the public reduces its inflation expectations.
c. the costs of reducing inflation are temporary and the costs of reducing it do not depend on the public's inflation expectations.
d. the costs of reducing inflation are temporary and the costs are smaller if the public reduces its inflation expectations.
d
You might also like to view...
In a market, social surplus is maximized if consumers' willingness to pay for the good equals the ________
A) marginal private cost of producing the good B) marginal external cost of producing the good C) marginal social cost of producing the good D) opportunity cost of producing the good
A lump-sum tax:
A. takes the same percentage of taxes from income from all taxpayers. B. requires those with low incomes to pay a smaller percentage of their income than high-income people. C. is levied so that low-income taxpayers pay a greater proportion of their income toward taxes than high-income taxpayers. D. taxes everyone the same amount, regardless of their income.
a person who was laid off during a recession and .....
What will be an ideal response?
If the nominal interest rate is 4 percent and expected inflation is 2.5 percent, then what is the expected real interest rate?
a. 1.6 percent b. 10 percent c. 6.5 percent d. 1.5 percent