Inflation targeting requires that the central bank
A) publicize its targeted inflation rate.
B) avoid changing the amount of the monetary base.
C) use a short-term interest rate as its policy instrument.
D) set a fixed price real assets.
E) adopt a k-percent rule for the inflation rate.
The figure above shows the market for reserves.
A
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Suppose the cost of flying a 200-seat plane for an airline is $100,000 and there are 10 empty seats on a flight. The airline should sell a ticket to a standby passenger only if the passenger is willing to pay
a. more than $200. b. more than $300. c. more than $500. d. This cannot be determined from the information given.
A person's real wage will fall if the
A) nominal wage falls. B) price level rises. C) nominal wage rises. D) price level falls. E) a and b
By looking at the demand curves for perfectly competitive firms and for monopolies, you can see that ______.
a. monopolists can change price by adjusting quantity
b. perfectly competitive firms can change price by adjusting quantity
c. monopolists deal with perfectly elastic demand
d. perfectly competitive firms deal with downward sloping demand
Which statement is true?
A. Open market operations are carried out by the President and Congress. B. The rate of growth of our money supply is set by law. C. The most powerful policy weapon of the Federal Reserve is raising and lowering the discount rate. D. The President's appointment of the chairman of the Federal Reserve must be approved by Congress.