The ability of a central bank to set monetary policy goals is
A) political independence.
B) goal independence.
C) policy independence.
D) instrument independence.
B
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Which one of the following is NOT a component of aggregate demand?
A) investment expenditures B) government purchases C) consumption spending D) merchandise inventories
Why does inflation cause problems in a society?
A) It gives people an incentive to hold money rather than spend it and provide income for others. B) It makes everything more expensive in real terms. C) People aren't able to anticipate it accurately. D) The cost of living rises for almost everyone in an inflation. E) For all of the above reasons.
Over a year, the money supply in a nation grew by 8 percent, while velocity rose by 2 percent and real GDP rose by 3 percent. This results in an inflation over the year of ________ percent
A) 7 B) 9 C) 13 D) 3
When federal government expenditures exceed tax receipts, the Treasury must
A) expand the money supply. B) raise taxes. C) reduce spending. D) sell bonds.