If a Central Bank Targets Inflation, Then

question 31

Multiple Choice

If a central bank targets inflation, then

• A)a reduction in unemployment will cause only a modest increase in inflation
• B)its policy implies an automatic tradeoff between inflation and unemployment
• C)it must assume that the Phillips curve is fairly flat
• D)it is guided by the belief that large deviations from full-employment are rare
• E)all of the above

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Definitions:

Indirect Acquisition

The process of obtaining control over a company by acquiring another entity that already holds a controlling interest in the target company.

Ownership Interest

A legal or equitable right or stake in an entity, often represented by shares or units, giving the holder a claim on part of the entity's assets and earnings.

Shares

Units of ownership interest in a corporation or financial asset that provide for an equal distribution in any profits, if any are declared, in the form of dividends.