What is the political business cycle and how does it relate to whether the central bank should have discretion or use a rule?
The political business cycle describes the idea that politicians may manipulate the economy to serve their own political ends. For example, the political party in power might want to generate an economic boom prior to an election, even if this policy is ultimately not in the best interest of the country. If the central bank had to follow a policy rule it would be unable to manipulate monetary policy for political gain.
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What is Rawlsian justice?
What will be an ideal response?
Figure 7.6 shows prices, demands, and cost data for the only restaurant in a small town. What is its profit from senior customers under the senior discount policy of a $7 senior price and a $10 non-senior price?
A. $1,200 B. $1,500 C. $2,280 D. $2,560
Why do bank runs usually have people rushing to their bank instead of waiting for the lines to taper off so they do not have to wait so long?
What will be an ideal response?
All of the following are considered among the four most important determinants in explaining exchange rate fluctuations in the long run except
A) relative rates of productivity growth across countries. B) preferences for domestic and foreign goods. C) tariffs and quotas. D) interest rates.