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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