One Surprising Insight from Viewing Policy as a "Game" Is

question 41

Multiple Choice

One surprising insight from viewing policy as a "game" is that:

• A) money growth has little or no impact on inflation in the long run.
• B) decreasing money growth may substantially increase the rate of inflation in the long run.
• C) central bankers should project an image of being conservative on economic policy matters, regardless of their personal views.
• D) uncertainty over the impact of policy makes little difference in designing an optimal policy.
• E) it is more difficult to control inflation when the central bank is highly independent.

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Definitions:

Economic Profit

The variance between total income and all costs, both seen and unseen, of a company.

Business Shutdown

A temporary or permanent cessation of operations by a firm due to financial difficulties or external circumstances.

Construction Firm

A business entity engaged in the construction of buildings, infrastructure, and other physical structures.