Arguments for adopting a policy rule include
A) the time-inconsistency problem can lead to poor economic outcomes.
B) discretionary policies pursue overly expansionary monetary policies to boost employment in the short run but generate higher inflation in the long run.
C) policy makers and politicians cannot be trusted.
D) all of the above.
D
You might also like to view...
If you are earning $20,000 this year and the CPI is 165, your real income in base year prices is
A) $121.21. B) $12,121.21. C) $20,000. D) $16,500. E) $33,000.
The figure above shows depicts the marginal revenue and costs of a perfectly competitive firm. When 170 units are produced, the firm
A) would definitely shut down. B) would incur an economic loss. C) would increase its price. D) has total costs less than $2,720.
Which of the following statements is correct?
A) Through autonomous monetary policy adjustments the Federal Reserve can ultimately determine the equilibrium real interest rate in the long run. B) Through autonomous monetary policy adjustments the Federal Reserve can ultimately determine potential output in the long run. C) Through autonomous monetary policy adjustments the Federal Reserve can target any inflation rate in the long run. D) all of the above E) none of the above
Which of the following is not correct?
a. Many measures of inequality are based on income, which may not reflect a person's standard of living. b. Because many of the poorest families receive in-kind transfers, more families have lower standards of living when compared to poverty rates based on income. c. Because people can borrow and save to smooth out life cycle changes in income, equality measures based only on income may not reflect a person's standard of living. d. A person's standard of living depends more on her permanent income than her transitory income, so inequality measures based on current income may be misleading.