Opponents of Inflation Targets Argue That _____

question 70

Multiple Choice

Opponents of inflation targets argue that _____

• A) such targets encourage workers to expect a low and stable inflation rate and hold down demands for wage increases.
• B) the Fed pays less attention to economic growth when it sets such targets.
• C) such targets encourage firms to plan on a low and stable inflation rate and hold down price increases.
• D) such targets encourage investors to plan on a low and stable inflation rate and hold down demands for interest rate increases.
• E) the Fed pays more attention to jobs and economic growth when it sets such targets.

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Definitions:

Spread

The difference between two prices, rates, or yields, often referring to the gap between bid and ask prices of a security.

Underwriters' Buying Price

The price at which underwriters purchase securities from the issuer before selling them to the public.

Offering Price

The price at which new shares are offered to the public by an issuer or an underwriter in initial public offerings or secondary offerings.

Dilution

Loss in existing shareholders’ value, in terms of either ownership, market value, book value, or EPS.