What is the main objective of ECB monetary policy?
(a) A stable unemployment rate.
(b) To eliminate government deficits.
(c) A low and stable inflation rate.
(d) None of the above.
Ans: (c) A low and stable inflation rate.
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A discount bond involves
A) interest payments from the borrower to the lender periodically during the life of the loan. B) payment by the borrower to the lender of the face value of the loan at maturity. C) no payment of principal by the borrower to the lender. D) payment of interest by the borrower to the lender every six months during the life of the loan.
The work of Robert Lucas and Thomas Sargent ________ the existence of a downward-sloping Phillips Curve in the ________
A) first proposed, short run B) first proposed, short and long runs C) cast further doubt on, long but not short run D) cast further doubt on, short and long runs
If, under a fixed exchange rate system, the dollar price of a Mexican peso is above its equilibrium level, then the
A) dollar is undervalued. B) peso is undervalued. C) dollar has appreciated. D) peso has depreciated.
Suppose a professor announces at the beginning of a course that he will give no failing grades because they are too damaging to self-esteem. How does such a policy affect equality and efficiency?
What will be an ideal response?