The make-up of the Governing Council of the European Central Bank and the methods used to calculate price stability for the monetary system can potentially result in:
A. a policy for the median country rather than a policy well suited for any country.
B. monetary policy that is well suited for some countries but ill-suited for others.
C. small countries having undue influence on the decisions of the Council.
D. all of the results listed are possible.
Answer: D
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A consumer's optimal choice occurs when the
a. consumer's valuation of the two goods equals the market's valuation of the two goods. b. consumer minimizes her expenditures. c. consumer attains the highest indifference curve. d. consumer's valuation of the two goods exceeds the market's valuation of the two goods.
The following graph shows the market equilibrium for corn in the United States. If the world price of corn is $6 and there are no trade restrictions, the United States will:?
What will be an ideal response?
People will buy more of an inferior good when their income decreases.
Answer the following statement true (T) or false (F)
In the view of rational expectations theory:
A. People make economic forecasts that are based on insider-outsider relationships and self-fulfilling prophecies B. People form beliefs about future economic outcomes that accurately reflect the likelihood that those outcomes will occur C. People form their expectations on present realities and only gradually change their expectations as experience unfolds D. The economy does not respond quickly to changes in prices, which causes a mis-allocation of economic resources