People with fixed incomes fare best in an inflationary period
a. True
b. False
Indicate whether the statement is true or false
False
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Application of the time inconsistency problem to monetary policy suggests that, without some mechanism to ensure commitment, the
A) rate of inflation will be higher than it would be with commitment. B) level of real output will be lower than it would be with commitment. C) rate of inflation will be higher and the level of real output will be lower than they would be with commitment. D) rate of inflation and the level of real output will be higher than they would be with commitment.
Crowding out is most likely to occur when the federal government
A. Runs a deficit and raises taxes to generate more revenue. B. Runs a surplus and pays off part of the debt. C. Has a balanced budget and refinances a portion of the debt that matures. D. Runs a deficit and sells bonds to make up the difference.
Policies that redistribute income
A. increase economic efficiency. B. increase income inequality. C. decrease incentives to earn high income. D. decrease compensating wage differentials.
The Monetary Control Act of 1980 extended the Fed's authority to:
A. impose required-reserve ratios on all depository institutions. B. control the discount rate. C. control the federal funds rate. D. carry out a massive federal bailout of failed savings and loan institutions.