The target rate of inflation for the European Central Bank (ECB) is:

(a) Above 2%.
(b) Below, but close to, 2%.
(c) 0%.
(d) None of the above, because the ECB targets a rate of deflation.


Answer: (b) Below, but close to, 2%.

Economics

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If the price level in the U.S. decreases, aggregate output demanded: a. decreases because U.S. products become cheaper relative to foreign products

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