The chief disadvantage of inflation targeting is that
A. it is difficult to measure the inflation rate precisely.
B. it is not easy for the public to observe the inflation rate.
C. it is difficult for the central bank to judge what policy actions are needed to hit the target.
D. people do not understand what inflation is.
Answer: C
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In much of Europe, the legal age to obtain a driver's license is 18. If the legal driving age in the United States was changed to 18, how would this affect the market for new automobiles? The market for automobile insurance?
What will be an ideal response?
Which of the following is a disadvantage to monetary targeting?
A) It relies on a stable money-inflation relationship. B) There is a delayed signal about the achievement of a target. C) It implies larger output fluctuations. D) It implies a lack of transparency.
The marginal factor cost is the
A) additional revenue obtained from a one-unit change in labor input. B) additional revenue obtained from a one-unit change in output. C) change in output resulting from the addition of one more worker. D) cost of using an additional unit of an input.
Assume that you are a member of the U.S. House of Representatives from your home state and district. Which of the following best explains why you have a strong incentive to get the federal government to finance pork-barrel projects in your district?
a. Most of the benefits of pork-barrel projects within your district will accrue to your constituents, while most of the costs will be imposed on voters from other districts. b. Most of the costs of pork-barrel projects within your district will be imposed on your constituents, while most of the benefits will accrue to voters from other districts. c. Pork producers are a powerful political lobby that will influence the actions of legislators in all districts. d. This is a trick question; in a representative democracy, there is little incentive for legislators to support pork-barrel projects.