Potential weaknesses of nominal GDP targeting include
A) it requires accurate estimates of potential GDP growth, which are not easy to achieve.
B) it implies that the central bank will respond to slowdowns in the real economy even if inflation is not falling.
C) real GDP growth that is below potential or inflation that is below the inflation objective will encourage more expansionary monetary policy.
D) it focuses not only on controlling inflation but also explicitly on stabilizing real GDP.
A
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Suppose that consumption spending is $4,200 billion, spending on durable goods is $1,200 billion, and spending on services is $2,000 billion. What does spending on nondurable goods equal?
A) $7,200 billion B) $1,000 billion C) $2,200 billion D) $3,200 billion E) There is not enough information to answer this question.
The natural rate of unemployment:
A. can vary over time and will differ across countries. B. can vary over time but tends to be the same across countries. C. tends to remain constant over time but at different levels for different countries. D. tends to remain constant over time and is the same across countries.