Answer the following questions true (T) or false (F)
1. The relationship between GDP and the money supply has gotten stronger since the 1980s.
2. The Fed has adopted an interest rate target for most of the time since World War II.
3. Inflation targeting allows monetary policy to focus on inflation and inflation forecasts except during times of severe recession.
1. FALSE
2. TRUE
3. TRUE
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Lionel's Lawn Care is a company that maintains residential yards. Lionel's cost for his standard package of mowing, edging, and trimming is $15, and he charges $25 for this service
For a total price of $40, Lionel will also trim shrubs, a service that adds an additional $10 to the total cost of the standard package. What is Lionel's marginal cost of adding the shrub-trimming service to the standard package? A) $15 B) $40 C) $10 D) $25
How does real GDP change in the long run when autonomous expenditure increases? Does real GDP change by the same amount as the change in aggregate demand? Why or why not?
What will be an ideal response?