A central bank announces it will decrease the inflation rate by 10 percentage points. People are skeptical of the announcement, but do expect the central bank will reduce inflation by 5 percentage points and so expected inflation falls by 5 percentage points. If the central bank decreases inflation by only 3 percentage points then the unemployment rate will fall
a. True
b. False
Indicate whether the statement is true or false
True
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An undervalued domestic currency:
A) harms all the economic agents in the country. B) benefits all the economic agents in the country C) makes imports more expensive for domestic consumers. D) can be achieved by buying the domestic currency.
Refer to Figure 9-4. Suppose the government allows imports of leather footwear into the United States. The market price falls to $24. What area represents domestic producer surplus?
A) T + U B) V + W + X + Y C) W + X + Y D) V
__________ argue that any exogenous decrease in investment spending would be countered automatically by either increased consumption or interest-sensitive investment spending
A) Monetarists B) Keynesians C) Classical economists D) None of the above.
Most economists consider a theory a good one if it predicts well
a. True b. False