Podcast
Questions and Answers
A central bank has operational independence if it can independently determine:
A central bank has operational independence if it can independently determine:
Central banks that are able to define how inflation is computed and determine its desired level are best described as having:
Central banks that are able to define how inflation is computed and determine its desired level are best described as having:
A central bank follows an inflation targeting monetary policy. If the permissible band is plus-or-minus 2% around the target inflation rate, the central bank is most likely to choose a target inflation rate of:
A central bank follows an inflation targeting monetary policy. If the permissible band is plus-or-minus 2% around the target inflation rate, the central bank is most likely to choose a target inflation rate of:
The government is reducing its spending to balance the budget, while the central bank is lowering its official policy rate. What will most likely be the combined effect on the economy?
The government is reducing its spending to balance the budget, while the central bank is lowering its official policy rate. What will most likely be the combined effect on the economy?
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If a central bank implements an exchange rate targeting policy successfully, the country's inflation rate is most likely to be:
If a central bank implements an exchange rate targeting policy successfully, the country's inflation rate is most likely to be:
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An economy's long-term trend rate of real GDP growth is 3% and the central bank's target inflation rate is 2%. If the policy rate is 6%, monetary policy is:
An economy's long-term trend rate of real GDP growth is 3% and the central bank's target inflation rate is 2%. If the policy rate is 6%, monetary policy is:
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What are the three essential qualities an effective central bank should possess?
What are the three essential qualities an effective central bank should possess?
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Which one of the following Federal Reserve monetary policies, when pursued in line with the U.S. government's fiscal policies, would help increase aggregate demand during a period of high unemployment?
Which one of the following Federal Reserve monetary policies, when pursued in line with the U.S. government's fiscal policies, would help increase aggregate demand during a period of high unemployment?
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Which of the following is currently the most-used target for central banks?
Which of the following is currently the most-used target for central banks?
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Which of the following fiscal and monetary policy scenarios is most likely to increase the size of the public sector relative to the private sector?
Which of the following fiscal and monetary policy scenarios is most likely to increase the size of the public sector relative to the private sector?
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Which of the following policy combinations would most likely lead to private sector growth and a decreasing government share of GDP?
Which of the following policy combinations would most likely lead to private sector growth and a decreasing government share of GDP?
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A central bank is said to have credibility if:
A central bank is said to have credibility if:
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Which of the following conditions is difficult for monetary policy to address because a central bank cannot reduce its nominal policy rate much below zero?
Which of the following conditions is difficult for monetary policy to address because a central bank cannot reduce its nominal policy rate much below zero?
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An analyst has determined the projected trend rate of real GDP growth is 2.5% and the central bank's inflation target is 2.5%. If the central bank policy rate is 5.0%, monetary policy is most likely:
An analyst has determined the projected trend rate of real GDP growth is 2.5% and the central bank's inflation target is 2.5%. If the central bank policy rate is 5.0%, monetary policy is most likely:
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To determine whether monetary policy is expansionary or contractionary, an analyst should compare the central bank's policy rate to the:
To determine whether monetary policy is expansionary or contractionary, an analyst should compare the central bank's policy rate to the:
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The most likely reason for deflation to persist despite expansionary monetary policy is:
The most likely reason for deflation to persist despite expansionary monetary policy is:
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Which of the following statements regarding the monetary policy transmission mechanism is most accurate?
Which of the following statements regarding the monetary policy transmission mechanism is most accurate?
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