An inflation-prone country
A) gains from vesting its monetary policy decisions with a "conservative" central bank.
B) loses from vesting its monetary policy decisions with a "conservative" central bank.
C) gains from vesting its fiscal policy decisions with a "conservative" central bank.
D) loses from vesting its fiscal policy decisions with a "conservative" central bank.
E) remains constant when vesting its fiscal policy decisions with a "conservative" central bank.
A
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If during the past decade the average rate of monetary growth has been 5% and the average inflation rate has been 5%, everything else held constant, when the Federal Reserve announces that the new rate of monetary growth will be 10%, the adaptive
expectation forecast of the inflation rate is A) 5%. B) between 5 and 10%. C) 10%. D) more than 10%.
Which would you expect to make the highest profits, other things equal?
A. Stackelberg follower B. Bertrand oligopolist C. Cournot oligopolist D. Stackelberg leader