If Prices and Wages Were Perfectly Flexible and Congress Had

question 109

Multiple Choice

If prices and wages were perfectly flexible and Congress had control over central bank decisions, Congress would have

• A)no political incentive to adjust the target rate of inflation.
• B)a long-run incentive to lower the target rate of inflation.
• C)a short-run incentive to raise the target rate of inflation.
• D)a short-run incentive to lower the target rate of inflation.
• E)a long-run incentive to raise the target rate of inflation.

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Definitions:

Testing Effects

The impact that pre-testing may have on the subjects' performance in subsequent assessments.

Cross-sectional

A research design that collects data from a population, or a representative subset, at one specific point in time.

Reasoning Ability

The capacity to think logically, understand and apply principles, and solve problems, often measured through cognitive tests.

Age

A measure of the length of time that a person or thing has existed, often used as a variable in research to examine differences or changes over time.