If inflation is very high, say 50 or 100 percent a year, monetary policymakers wishing to lower it will shift their focus to controlling:
A. the long-term interest rate.
B. the short-term interest rate.
C. money growth.
D. the exchange rate.
Answer: C
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The labor demand curve is downward sloping because as the real wage ________ the amount of labor hired ________
A) falls; decreases B) falls; increases C) rises; remains constant D) rises; increases
Using Figure 3 below the distance between what 2 lines illustrate an inflationary output gap?
A. PAE2 to PAE3
B. PAE1 to PAE2
C. Y1 to Y2
D. Y2 to Y3
The process of building up capital includes
a. acquiring funds from banks and other sources. b. use of borrowed funds to hire inputs to build factories, warehouses, etc. c. completion of the investment process by adding machinery and inventory. d. All of the above are correct.
If the unemployment rate increases from 4 percent to 10 percent, then the economy is mostly likely in a(n):
A. expansion. B. aggregation. C. recession. D. boom.