Today there is a clear consensus about the best way to design a central bank. What are the criteria for a successful central bank?
What will be an ideal response?
To be successful, a central bank must (1) be independent of political pressures; (2) make decisions by committee; (3) be accountable to the public and transparent in communicating its policy actions and (4) operate within an explicit framework that clearly states its goals and makes clear the tradeoffs among them.
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Exhibit 10-7 Aggregate supply and demand curves
In Exhibit 10-7, if aggregate demand increases from AD1 to AD2,
A. output and prices will increase. B. output and prices will decrease. C. output alone will increase. D. prices alone will increase.
A mixed economy is one that combines both public and private ownership of property.
Answer the following statement true (T) or false (F)
The law of comparative advantage implies that a doctor who is also a talented auto mechanic should
A. get a part-time job at a gas station. B. do his or her own auto repairs and those of his or her neighbors. C. hire a professional mechanic to repair his or her car. D. only repair the cars of other doctors.
The above figure shows the marginal benefits and marginal costs of a college education. If no subsidies are paid, enrollment equals
A) 0. B) 10 million. C) 15 million. D) 25 million.