Under an exchange-rate targeting rule for monetary policy, a crawling peg
A) fixes the value of the domestic currency to a commodity such as gold.
B) fixes the value of the domestic currency to that of a large, low-inflation country.
C) allows the domestic currency to depreciate at a steady rate so that inflation in the pegging country can be higher than that of the anchor country.
D) allows the domestic currency to depreciate at a steady rate so that inflation in the pegging country can be lower than that of the anchor country.
C
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A tax of $1 on buyers shifts the demand curve downward by exactly $1
a. True b. False Indicate whether the statement is true or false
According to the representative heuristic, people will tend to think that Karen is a vegetarian if:
A. they have just read a book about vegetarians. B. Karen has many of the characteristics of a stereotypical vegetarian. C. if the fraction of vegetarians in the population is increasing. D. they themselves are vegetarians.
If unemployment is above the natural rate of unemployment, then potential GDP is:
. Equal to the GDP gap b. Greater than actual GDP c. Less than actual GDP d. Equal to actual GDP
If a natural disaster were to cause a negative long-run supply shock to the economy, once the economy adjusts, the new equilibrium will be at a:
A. higher price level and lower level of output. B. lower price level and lower level of output. C. higher price level and higher level of output. D. lower price level and higher level of output.