Explain monetary policy goals and discuss any goal conflicts in the long run and the short run
What will be an ideal response?
Monetary policy has three goals: price level stability, maximum employment, and moderate long-term interest rates. In the long run, these goals all coincide and are best met by keeping the inflation rate low. In the short run, however, there is a tradeoff: Higher inflation can lead to lower unemployment and hence higher employment. So in the short run, higher employment can be attained but at the cost of higher inflation.
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Fiscal policy is policy aimed at controlling undesired fluctuations in overall spending through changes in
A) government expenditures and taxes. B) government subsidies to marginal business firms. C) interest rates. D) methods of making seasonal adjustments. E) price and wage regulation.
Steve holds 100 shares of a company that currently trade at $10 . There is a 50 percent probability of the market price increasing to $15 within the next quarter. If Steve waits for the market price of shares to increase before selling them off, he would be considered risk averse
Indicate whether the statement is true or false