Nominal GDP targeting ________
A) is consistent with a dual mandate
B) has been adopted in more countries than have adopted inflation targeting
C) is, compared to inflation targeting, easier both to implement and to explain
D) is preferred strongly by "conservative" central bankers
A
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Suppose the price elasticity of demand for Mexican food is 1.23 and the price elasticity of supply is 0.47. If the government imposes a tax on Mexican food, do buyers or sellers pay most of the tax? Why?
What will be an ideal response?
According to rational expectations theory, which of the following is the best approach to lower the inflation rate?
a. Preannounced stable government policies. b. Unpredictable government policies. c. First predictable and then unpredictable government policies. d. None of these.