The Canadian experience with inflation and unemployment in the early 1990s has this to say about policy rules:
A) A central bank independent of political pressure may thereby not be serving the public's politically-revealed preferences.
B) A central bank bowing to political pressure cannot get the inflation rate below the unemployment rate.
C) A constant-growth-rate-of-money rule cannot stabilize inflation if unemployment is allowed to vary substantially.
D) A constant-growth-rate-of-high-powered-money rule allows too much variation in the growth of the actual money supply to hold down inflation.
A
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The above figures show the market for gasoline. Which figure shows the effect of a nation-wide strike by municipal bus drivers, which causes more people to drive their cars to work?
A) Figure A B) Figure B C) Figure C D) Figure D
The law of small numbers describes:
A) the tendency for people to overstate the probability associated with rare events. B) the ability to correctly estimate the expected outcome from a small number of events. C) the higher probability that small numbers (like 1, 2, and 3 ) occur in random samples relative to large number (like 8 or 9 ). D) the improved accuracy of averages to estimate relatively small numbers (on the order of 1 or 10 ) than relatively large numbers (on the order of 1,000 or 10,000 ).