Which of the following arguments is often used by opponents of Federal Reserve independence?
A) Independence slows the policy decision process.
B) Independence causes inflationary pressures to build because of excessive monetary growth.
C) Independence leads to conflicts between monetary and fiscal policy.
D) Independence causes a concentration of financial power.
C
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If companies decrease investment spending because of lower expected returns on projects, forecasters should anticipate (everything else the same) that
A) GDP will rise. B) the money supply will fall. C) interest rates will fall. D) saving will increase.
The larger the positive cross elasticity coefficient of demand between products X and Y, the:
A. stronger their complementariness. B. greater their substitutability. C. smaller the price elasticity of demand for both products. D. the less sensitive purchases of each are to increases in income.