Answer the following questions true (T) or false (F)
1. The Federal Reserve could target both the money supply and the interest rate at the same time if it controlled money demand along with money supply.
2. Inflation targeting has been adopted by the central banks of several countries including the European Central Bank.
3. Inflation targeting has typically been accompanied by lower inflation.
1. TRUE
2. TRUE
3. TRUE
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If producers who hire labor in a competitive labor market decide to purchase the new automated machine that completes the work of 30 employees, we would expect the:
A. labor-supply curve in that market to shift left. B. labor-demand curve in that market to shift left. C. labor-supply curve in that market to shift right. D. labor-demand curve in that market to shift right.
________ inflation is more stable than __________ inflation, because it excludes food and gasoline prices.
A. Core; headline B. Headline; core C. Core; nominal D. Nominal; core
Other things equal, when Europeans want to buy more grains from the United States:
a. U.S. imports will increase. b. European exports will increase at every level of domestic income. c. U.S. exports will increase at every level of domestic income. d. the U.S. balance of payments will show a deficit. e. U.S. consumption spending will fall.
Ceteris paribus, for the owner of a sawmill, lumber and the sawdust that go into particle board are
A. Substitutes in production. B. Unrelated in the sawmill operator's decision. C. Complements in production; by-products. D. None of the choices are correct.