Analysis of the transmission mechanisms of monetary policy provides four basic lessons for a central bank's conduct of monetary policy. These lessons include the following
A) Rising interest rates indicate a tightening of monetary policy, whereas falling interest rates indicate an easing of monetary policy.
B) Monetary policy can be highly effective in reviving a weak economy even if short-term interest rates are already near zero.
C) Avoiding fluctuations in the level of unemployment is an important objective of monetary policy, thus providing a rationale for interest-rate stability as the primary long-run goal for monetary policy.
D) Other asset prices beside those on short-term debt instruments do not contain important information about the stance of monetary policy because they are not important elements in various monetary policy transmission mechanisms.
B
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The measure of the cost of a standard basket of goods and services in any period relative to the cost of the same basket of goods and services in the base year is called the:
A. consumer price index. B. consumption cost calculator. C. consumption production index. D. consumer production index.
The institution that monitors and enforces trade agreements and promotes free trade is:
A. the World Bank. B. UNICEF. C. the National Alliance Trade Organization. D. the World Trade Organization.
Which of the following represents the most valuable resource sold by most households in 2009?
a. Land b. Labor c. Capital d. Entrepreneurial ability
The AFC curve
A. is a horizontal line. B. is the same as the total fixed cost curve. C. is U-shaped. D. always slopes downward.