During the time period represented in Figure 7.1, Country A
A. Had no need for COLAs.
B. Experienced periods of both inflation and deflation.
C. Never achieved the inflation goal set by the Full Employment and Balanced Growth Act of 1978.
D. Experienced only inflation.
Answer: A
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What will be an ideal response?
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.
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Indicate whether the statement is true or false
The largest portion of any nation's balance of payments current account is the
A) importing and exporting of merchandise goods. B) importing and exporting of services. C) importing and exporting of gold. D) importing and exporting of capital goods.