The Canadian Experience with Inflation and Unemployment in the Early

question 119

Multiple Choice

The Canadian experience with inflation and unemployment in the early 1990s has this to say about policy rules:

• A)A central bank independent of political pressure may thereby not be serving the public's politically-revealed preferences.
• B)A central bank bowing to political pressure cannot get the inflation rate below the unemployment rate.
• C)A constant-growth-rate-of-money rule cannot stabilize inflation if unemployment is allowed to vary substantially.
• D)A constant-growth-rate-of-high-powered-money rule allows too much variation in the growth of the actual money supply to hold down inflation.

---

Definitions:

Positron-Emission Tomography

An imaging technique that uses radioactive substances to visualize and measure changes in metabolic processes, and hence, the functioning of organs and tissues.

Brain Activation

The process by which regions of the brain become more active, typically in response to a specific stimulus or task.

Genetics

The biological study of genes, heredity, and the variation of organisms, determining characteristics of living organisms.

Psyche

Refers to the human mind or soul, as a fundamental part of individual's mental and emotional state or wellbeing.