Which of the following is NOT a disadvantage to inflation targeting?
A) There is a delayed signal about achievement of the target.
B) Inflation targets could impose a rigid rule on policymakers.
C) There is potential for larger output fluctuations.
D) There is a lack of transparency.
D
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When the Federal Reserve was formed, state-chartered banks were __________ Fed member banks
A) automatically made B) required to become C) given the option to become D) not allowed to become
For this question, assume the interest parity conditions holds. Also assume that the domestic interest rate is 9% and that the foreign interest rate is 5%. Given this information, we would expect that
A) individuals will only hold foreign bonds. B) individuals will only hold domestic bonds. C) the domestic currency is expected to appreciate by 4%. D) the domestic currency is expected to depreciate by 4%.