Proponents of inflation targeting generally think that:

A. the economy will have fewer, shorter, and less severe business cycles if the Fed holds the
rate of inflation to low, targeted levels from year to year.
B. low interest rates are inflationary and high interest rates are deflationary.
C. fiscal policy is more effective in stabilizing the economy than monetary policy.
D. the Fed should strive to achieve zero inflation.


A. the economy will have fewer, shorter, and less severe business cycles if the Fed holds the
rate of inflation to low, targeted levels from year to year.

Economics

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The United States is the world's leading grain-producing nation. Exporting U.S. grain causes the

a. domestic consumption of grain to rise because of the added foreign demand. b. price of grain in the domestic market to fall because foreigners are now taking some of the domestic demand. c. price of grain to domestic consumers to rise because of the added foreign demand. d. standard of living of foreigners to fall because they lose purchasing power.

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When a supply curve is relatively flat, the

a. sellers are not at all responsive to a change in price. b. equilibrium price changes substantially when the demand for the good changes. c. supply is relatively elastic. d. supply is relatively inelastic.

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When total utility is at a maximum, marginal utility is zero.

a. true b. false

Economics