What constitutes meaningful independence of a central bank?
What will be an ideal response?
The central bank must be able to conduct policy without direct interference from the government and it also must be able to set goals for which it can be held accountable.
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When an economy faces an inflationary gap, an appropriate fiscal policy is to
A) increase aggregate demand. B) decrease government expenditure. C) decrease the quantity of money. D) decrease taxes. E) increase the quantity of money.
The Lorenz curve in the above figure implies that
A) income is equally distributed. B) the lowest fifth of households account for less than 20 percent of income. C) the highest fifth of households account for less than 20 percent of income. D) the lowest fifth of households account for more than 20 percent of income.
Which statement is true?
A. William Julius Wilson and Charles Murray are basically in agreement about the causes of the formation of a permanent underclass. B. The permanent underclass has more white members than black members. C. There is very little evidence to show that there is actually a permanent underclass. D. There are more poor whites than poor blacks in the United States.
If the money supply is 2000, the price level is 20, and the inflation rate is 50%, what is the amount of seigniorage?
A) 100 B) 50 C) 10 D) 5