If the great majority of shocks to our system arise from unpredictable shocks to money demand, the preferred tactic of monetary policy is targeting
a. reserves.
b. interest rates.
c. M2.
d. reserves plus currency.
B
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Refer to the above figures. A quota is placed on a foreign good. Which figure represents the situation in the domestic market for a competing domestic good?
A) Panel A B) Panel B C) Panel C D) Panel D
A solution to the budget-gaming problem is
a. Introduce milestones or kinks in the compensation scheme b. Use a target based pay function with each target scoring greater return c. Do not base compensation on meeting a particular budget goal d. All of the above
A major difference between tariffs and import quotas is that
a. tariffs create deadweight losses, but import quotas do not. b. tariffs help domestic consumers, and import quotas help domestic producers. c. tariffs raise revenue for the government, but import quotas create surplus for those who get the licenses to import. d. All of the above are correct.
The economizing problem is
What will be an ideal response?