The steeper the central bank reaction function, the ________ the central bank increases the interest rate in response to the current inflation rate being above the target inflation rate and the ________ the central bank decreases the interest rate in
response to the actual inflation rate being below the target inflation rate. A) more; more
B) more; less
C) less; more
D) less, less
A
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In 1980, one Zimbabwean dollar was worth 1.47 U.S. dollars. By the end of 2008, the exchange rate was one U.S. dollar to 2 billion Zimbabwean dollars
When an economy experiences rapid increases in the price level such as what occurred in Zimbabwe, the economy is said to experience A) inflation. B) stagflation. C) hyperinflation. D) deflation.
Consider the production function for bottled water. All of the following would be considered variable inputs except:
A) the plastic bottles. B) the water the bottles are filled with. C) the machine used to fill each bottle. D) the electricity used to power the machine used to fill the bottles.
The Fed's goal is
a. moderate and stable inflation b. zero inflation c. a low price level d. an inflation rate that diminishes over time e. low and stable inflation
The product-variety externality and the business-stealing externality are both spillover costs of new firms entering a monopolistically competitive market
a. True b. False Indicate whether the statement is true or false