Which of the following statements is correct?
a. A central bank has absolute control over the nominal interest rate but not the real interest rate.
b. A central bank has absolute control over the real interest rate but not the nominal interest rate.
c. A central bank has absolute control over both the nominal and real interest rates.
d. A central bank does not have absolute control over the nominal interest rate or the real interest rate.
.D
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One thing that distinguishes normative economic principles from positive economic principles is that:
A. normative principles are pessimistic and positive principles are optimistic. B. normative principles tell us how people should behave, and positive principles tell us how people will behave. C. normative principles tell us how people will behave, and positive principles tell us how people should behave. D. normative principles reflect social norms, and positive principles reflect universal truths.
What did the Bretton Woods Agreement do?
What will be an ideal response?
According to the theory of rational expectations,
a. workers' experience tells them that government action to lower unemployment will not affect inflation. b. consumers and investors generally behave so that rationally formed government attempts to stimulate aggregate demand have their desired effects. c. policy goals can be achieved easily in the short run. d. workers' wage demands include anticipated inflation. e. expansionary monetary policy will lead to permanent interest rate declines.
If a good has a price elasticity of demand coefficient less than one, then:
A. this good has an elastic demand. B. this good has an inelastic demand. C. a 10 percent increase in the price will result in a greater than 10 percent decrease in the quantity demanded. D. the demand curve will be vertical.