Which of These Is Not a Reason Why Economies Should

question 95

Multiple Choice

Which of these is not a reason why economies should aim for 2 to 3 percent inflation?

• A) It helps firms to more easily adjust real wages
• B) It allows a margin of error for those deciding on the money supply
• C) It allows the Fed to more easily engage in expansionary monetary policy
• D) It increases the real wage of workers

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Definitions:

SAT

A standardized test commonly used for college admissions in the United States, assessing mathematical, writing, and reading skills.

Confirmation Bias

The inclination to seek out, comprehend, prefer, and remember data in a manner that affirms an individual's already established convictions or assumptions.

Effective Problem Solving

The process of identifying a problem, devising and implementing a solution that successfully overcomes the issue in a practical and efficient manner.

Better-Fed Population

A community or group of people who have access to a healthy and adequate diet.