The Friedman Rule Describes Optimal Monetary Policy and Is

question 59

Multiple Choice

The Friedman rule describes optimal monetary policy and is

• A) always followed in practice by central banks.
• B) too difficult to implement in practice.
• C) never followed in practice by central banks.
• D) a policy central banks would like to follow but do not know how to.
• E) only followed by central banks during expansions.

---

Definitions:

Four-Firm Sales Concentration Ratio

A measure indicating the total market share of the four largest firms within an industry, used to assess the level of market competition.

Geographic Concentration

The phenomenon where certain industries or businesses are clustered in specific regions, often due to advantages like resources or skilled labor.

X-Inefficiency

X-Inefficiency occurs when a firm fails to use its resources efficiently due to a lack of competitive pressure.

Differentiated Oligopoly

A market structure in which a few firms dominate the market by selling products that are distinct yet somewhat substitutable, focusing on product differentiation to maintain competitive advantage.