The time inconsistency of monetary policy means that
a. once people have formed expectations of low inflation based on a promise by the central bank, the central bank is tempted to raise inflation to lower unemployment.
b. at some times central banks think it is more important to keep unemployment low; at other times, they think it is more important to keep inflation low.
c. monetary policy is not consistent across time because it is influenced by politics.
d. monetary policy is not consistent across time because policymakers are incompetent.
a
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The implicit rental rate for capital includes the
A) total value of a piece of capital equipment. B) interest income forgone by purchasing the piece of capital equipment. C) firm's normal profit. D) amount paid for the use of a piece of capital equipment owned by someone else.
National saving minus investment equals the current account
Indicate whether the statement is true or false
According to the following figure, demand is unitary elastic at P = $________.
A. 20 B. 10 C. 25 D. 15 E. 5
When the demand curve is a downward sloping straight line, the quantity at which the demand curve intersects the horizontal (quantity) axis is ________ the quantity at which the marginal revenue curve intersects the horizontal (quantity) axis.
A. equal to B. four times C. less than D. twice