Exchange-Rate Targeting Allows a Central Bank to ________,Thus This Will

question 59

Multiple Choice

Exchange-rate targeting allows a central bank to ________,thus this will ________ the probability of policy developing a time-inconsistency problem.

• A)be governed by a policy rule;decrease
• B)follow discretionary policy;decrease
• C)be governed by a policy rule;increase
• D)follow discretionary policy;increase

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Definitions:

Pension Plan

A type of retirement plan where an employer makes contributions to a pool of funds set aside for an employee's future benefit.

Multiplier

A factor by which an economic variable is multiplied to estimate its impact on other variables.

Salaries

Regular payments made by an employer to an employee, typically paid monthly or biweekly for professional or office work.

Social Security Credit

Based on total wages and self-employment income during the year; the amount of earnings it takes to earn a credit changes each year; in 2009, a person had to earn $1,090 in covered earnings to get one credit; people born after 1929 need 40 credits in their lifetime to qualify for Social Security benefits.