Which of the following statements about inflation targeting is true?
a. Inflation targeting allows the central bank to achieve multiple goals like low unemployment and economic growth.
b. Inflation targeting has not been adopted by the Fed.
c. A central bank that adopts inflation targeting is intrinsically dependent on fiscal policy.
d. Inflation targeting decreases the perceived uncertainty derived from the central bank's course of action.
e. Inflation targeting increases the uncertainty associated with the central bank's course of action.
d
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Which of the following will happen if the GDP of a country increases and the population remains constant?
A) Income per capita will remain constant. B) Income per capita will increase. C) Unemployment rate will increase. D) Gross national product will decrease.
Under the rational expectations hypothesis, which of the following is the most likely effect of a shift to a more expansionary monetary policy?
a. In the short run, the real rate of output will be unaffected, but in the long run, it will increase. b. In the short run, the real rate of output will increase, but in the long run, it will be unchanged. c. There will be a permanent increase in the real rate of output, but the inflation rate will also be a little higher. d. In the short run, the impact on the real rate of output is uncertain; in the long run, it will remain unchanged.
Which one of the following best exemplifies the principal-agent problem in the employer- employee relationship?
A. A worker takes 20-minute coffee-breaks although the employer allots only 15 minutes for this purpose. B. A worker is on the job 50 hours per week although only 40 hours are required for promotion. C. A worker opts for early retirement in response to the firm's incentive plan. D. A worker's productivity is independent of the wage paid.
The main decision for a profit-maximizing perfectly competitive firm is not what ________ but what ________.
A. price to charge; level of output to produce B. level of output to produce; price to charge C. level of output to produce; total revenue to achieve D. price to charge; total cost to achieve