There Is ________ Relationship Between Inflation and Central Bank Independence

question 51

Multiple Choice

There is ________ relationship between inflation and central bank independence and ________ relationship between long-run rates of unemployment and central bank independence.

• A)a negative; no
• B)a negative; a negative
• C)a positive; no
• D)a positive; a negative

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Definitions:

Spot Market

A market where financial instruments or commodities are traded for immediate delivery.

Expected Inflation

The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling, as anticipated by consumers, investors, and economists.

Purchasing Power Parity

An economic theory that compares different countries' currencies through a "basket of goods" approach to determine relative currency values and exchange rates.

Spot Market

A public financial market in which financial instruments or commodities are traded for immediate delivery.