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Question
Suppose it takes roughly two years for monetary policy to have a significant impact on inflation. If inflation is currently low but policymakers believe inflation will rise over the next two years with an unchanged stance of monetary policy, when should they tighten monetary policy to prevent the inflationary surge?A. now
B. wait until overt signs of inflation appear
C. next year
D. two years later
Answer
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Related questions
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The organization responsible for the conduct of monetary policy in the United States is the
A. Comptroller of the Currency.
B. U.S. Treasury.
C. Federal Reserve System.
D. Bureau of Monetary Affairs.
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A. balanced budgets.
B. rapidly growing money supplies.
C. falling money supplies.
D. constant money supplies.
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B. banks.
C. over-the-counter markets.
D. finance companies.
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B. since deregulation now provide services only to small depositors.
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D. produce nothing of value and are therefore a drain on society's resources.
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A. consumption function
B. investment function
C. government spending and tax
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An autonomous increase in money demand, other things equal, shifts the ________ curve to the ________.
A. IS; right
B. IS; left
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Q:
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B. a discretionary policy.
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Q:
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B. the Lucas critique.
C. public choice theory.
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Q:
The Lucas critique indicates that
A. advocates of discretionary policies' criticisms of rational expectations models are well-founded.
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Q:
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C. output will be lower.
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Q:
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Q:
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Q:
Explain and demonstrate graphically the effects of a negative supply shock in both the short-run and long-run.
Q:
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Q:
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B. right; depreciate
C. left; appreciate
D. left; depreciate