The ECB's Governing Council has price stability as a primary objective. It has defined price stability as:
A. an inflation rate in the three to five percent range.
B. an inflation rate below, but close to, 2 percent over the medium term.
C. a zero rate of inflation.
D. an inflation rate less than 5 percent.
Answer: B
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Assume that the marginal propensity to consume equals 0.75 and the marginal propensity to import equals 0.10 . By how much does spending on domestic goods increase if income increases by $300?
a. $195 b. $225 c. $30 d. $300 e. $75
Shaina and Mariah have a business that provides personal fitness training services. They know that after raising their prices from $50 to $75 per hour, the quantity of hours they spent delivering training services fell from 90 to 80 hours per week. The demand for their services is:
a. inelastic, with a price elasticity coefficient greater than one. b. inelastic, with a price elasticity coefficient less than one. c. elastic, with a price elasticity coefficient greater than one. d. elastic, with a price elasticity coefficient less than one.
Refer to the above table. At an output of 2 units, average total costs are
A. $45. B. $16. C. $122. D. $61.
An increase in personal income taxes would shift AD to the:
A. Right because C will increase B. Left because C will decrease C. Right because G will increase D. Left because G will decrease