Potential weaknesses of nominal GDP targeting include
A) it requires accurate estimates of potential GDP growth, which are not easy to achieve.
B) it implies that the central bank will respond to slowdowns in the real economy even if inflation is not falling.
C) real GDP growth that is below potential or inflation that is below the inflation objective will encourage more expansionary monetary policy.
D) it focuses not only on controlling inflation but also explicitly on stabilizing real GDP.
A
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The labor force is defined as
A) all individuals who are at least 16 years old and are currently employed. B) all individuals who are currently employed. C) all individuals who are at least 16 years old and are employed, looking for work or not looking for work. D) all individuals who are at least 16 years old and are currently employed or unemployed.
Sam is suing someone in court for $10,000. The probability that Sam will lose the case is 1/h where h is the number of hours that Sam's attorney works on the case
The lawyer charges $500 per hour if he is to be paid hourly, or he requests 20% of the settlement if he is to be paid on a contingency basis. Assuming both Sam and the attorney are risk-neutral wealth maximizers, is either contract efficient?
Which of the following has been suggested as a cause of the Great Depression?
a. a decline in the money supply b. a decrease in stock prices c. the collapse of the banking system d. All of the above are correct.
If a negative externality is to be internalized to the decision maker, the:
A. consumer of the good should pay a tax equal to the marginal benefit to those outside the trade that results from consuming the good. B. producers' marginal costs should be reduced by an amount equal to the marginal cost to those outside the trade that results from production of the good. C. producers' marginal costs should be increased by an amount equal to the marginal cost to those outside the trade that results from production of the good. D. consumer of the good should receive a subsidy equal to the marginal cost to those outside the trade that results from production of the good.