With inflation targeting, the Federal Reserve would be required to announce its targeted band for:
A. Unemployment
B. Economic growth
C. Changes in the price level
D. Changes in the rate of taxation
C. Changes in the price level
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For people with very low incomes, the Earned Income Tax Credit operates like a(n):
A. wage subsidy. B. lump sum transfer. C. tax on wages. D. in-kind transfer.
If the value of the marginal product of physical capital is $20 and the value of the marginal product of labor is $5, the highest price that a firm should pay for an additional unit of physical capital is:
A) $4. B) $5. C) $20. D) $100.
Which of the following government programs will create a surplus?
A. rent control B. the minimum wage law C. usury laws D. price controls on oil
In the case of a currency union, what is a nominal anchor?
A) It is the weight of the efficiency loss from changing to a common currency. B) It is an independent value, such as the value of the common currency unit, constraining the ability of a nation to inflate its currency and prices. C) It is a nominal measure of GDP that is not the same as the measure for real GDP. D) It links that nation to other members of the currency union and permits no trade or financial relationships outside the union.