The problems of raising the level of the inflation target include
A) if the zero-lower-bound problem is rare, then the benefits of a higher inflation target are not very large.
B) the costs of higher inflation in terms of the distortions it produces in the economy are high.
C) it is more difficult to stabilize the inflation rate at a higher targeting level.
D) all of the above.
D
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Suppose favorable weather resulted in a bumper crop of oranges in Florida. In the market for oranges
A) the supply curve shifted to the right resulting in a decrease in the equilibrium price. B) the demand curve shifted to the right resulting in an increase in the equilibrium price. C) the supply curve shifted to the right resulting in an increase in the equilibrium price. D) the demand curve shifted to the left resulting in a decrease in the equilibrium price.
Suppose that a $4 per unit tax is imposed on the sellers of DVDs. The effect of the tax will be to
a. shift the supply curve up by exactly $4 and the price paid by buyers will remain unchanged. b. shift the supply curve up by exactly $4 and the price paid by buyers will rise by less than $4. c. shift the supply curve up by exactly $4 and the price received by sellers will rise by exactly $4. d. shift the demand curve down by exactly $4 and the price paid by buyers will fall by exactly $4.
Suppose the demand for good X is given by Qdx = 10 + axPx + ayPy + aMM. From the law of demand we know that ax will be:
A. greater than zero. B. less than zero. C. zero. D. none of the statements associated with this question are correct.
If Eddie can produce 40 milk shakes or 20 banana splits in an hour, and Tina can produce 30 milk shakes or 16 banana splits in an hour, then Eddie has a comparative advantage in producing banana splits.
Answer the following statement true (T) or false (F)