If a Central Bank Had to Give Up Its Discretion

question 106

Multiple Choice

If a central bank had to give up its discretion and had to follow a rule that required it to keep inflation low, how would the Phillips curve shift?

• A) The short-run Phillips curve would shift up.
• B) The short-run Phillips curve would shift down.
• C) The long-run Phillips curve would shift right.
• D) The long-run Phillips curve would shift left.

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Definitions:

Hyperglycemia

A condition characterized by abnormally high blood sugar levels, commonly associated with diabetes.

Overexertion

The result of physical or mental effort exceeding one's capacity, leading to stress or health issues.

Back Strain

An injury to the muscles or tendons in the back due to overstretching or tearing.

Hypoglycemia

Low blood sugar.