What has been the approach of the European Central Bank to monetary targeting?
What will be an ideal response?
Although the European Central Bank has emphasized the importance of price stability, in practice it has not committed to a monetary targeting approach or to an inflation targeting approach.
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In a small open economy, an increase in government spending, while taxes remain the same, will be accompanied by
A) a decrease in private investment and an increase in privates saving. B) an increase in private investment and a decrease in private savings. C) a decrease in national savings and an increase in foreign borrowing. D) an increase in national savings and a decrease in foreign borrowing.
In the simple Keynesian model, if the tax function is given by T = 0.15Y and the consumption function is C = 50 + 0.7YD then a 10-unit increase in government spending would increase equilibrium income by
a. 10 units. b. 11.2 units. c. 22.4 units. d. 30 units. e. none of the above
Which of the following best illustrates the human capital of a survivor stranded on an island?
a. the fishing poles she has produced b. the invention of a better fishing lure c. the fresh fruit and fish on and around the island d. her previous training in a survival course
Core inflation is defined as
A. inflation that takes health care and energy into account. B. inflation that does not take health care and energy into account. C. inflation that does not take energy and food into account. D. inflation that takes energy and food into account.