Inflation targeting makes more sense than unemployment targeting, because ________
A) monetary policies affect inflation, not unemployment
B) expected unemployment is not a key determinant of the unemployment rate
C) a commitment to avoid high inflation is inherently more credible than a commitment to avoid high unemployment
D) most voters and most elected officials are more concerned about inflation
B
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Refer to Figure 27-1. Suppose the economy is in short-run equilibrium above potential GDP and no policy is pursued. Using the static AD-AS model in the figure above, this would be depicted as a movement from
A) D to C. B) C to D. C) E to A. D) C to B. E) A to E.
A ten-year $1,000,000-face-value zero-coupon Treasury bond has a market price of __________ when the interest rate is 6.34%
A) $366,000 B) $936,600 C) $784,902 D) $540,796
Altering incentives so that people take account of the external effects of their actions
a. is called internalizing the externality. b. can be done by imposing a corrective tax. c. is the role of government in markets with externalities. d. All of the above are correct.
If in some year nominal GDP was $18 billion and the GDP deflator was 120, what was real GDP?
a. $6.7 billion. b. $15 billion. c. $21.6 billion. d. $38 billion.