If the monetary policy curve is correct, then policy makers care only about inflation and not at all about aggregate output and unemployment. Comment
What will be an ideal response?
The monetary policy curve is a concise expression of monetary policy, highlighting policy makers' concern with inflation stability. Policy concerns other than inflation are represented by shifts of the MP curve, so that the real interest rate may change independently of the inflation rate. Moreover, the goal of inflation stability implies the need to be responsive to macroeconomic conditions in general, since the behavior of inflation is closely linked to changes in aggregate output and unemployment.
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What crucial role do financial intermediaries perform in an economy?
What will be an ideal response?
In the textbook model of endogenous growth, long-run output growth would decline if there were either a ________ in the saving rate or a ________ in the depreciation rate
A) rise; rise B) rise; fall C) fall; rise D) fall; fall