Suppose it takes roughly two years for monetary policy to have a significant impact on inflation
If inflation is currently low but policymakers believe inflation will rise over the next two years with an unchanged stance of monetary policy, when should they tighten monetary policy to prevent the inflationary surge? A) now
B) wait until overt signs of inflation appear
C) next year
D) two years later
A
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People know that the inflation rate will increase from 3 percent to 5 percent. As a result
A) the nominal interest rate falls by 2 percentage points. B) the nominal interest rate is constant. C) the nominal interest rate rises by 2 percentage points. D) the real interest rate rises by 2 percentage points.
Because new plastic and recycled plastic are substitutes, as the price of newly produced plastic decreases
A) the demand curve for recycled plastic shifts to the left. B) there is a movement up along the demand curve for recycled plastic. C) there is a movement down along the demand curve for recycled plastic. D) the demand curve for recycled plastic shifts to the right.
The repercussions that the money wealth and international effects have on aggregate production and aggregate expenditure cause the aggregate demand curve to become steeper than it would be without such repercussions.
Answer the following statement true (T) or false (F)
The above diagram shows the short-run average total cost curves for five different plant sizes of a firm. In the long run the firm should produce output 0x with a plant of size:
A. #3. B. #2. C. #4. D. #1.