A Central Feature of Monetary Policy Strategies in All Countries

question 14

Multiple Choice

A central feature of monetary policy strategies in all countries is the use of a nominal variable that monetary policymakers use as an intermediate target to achieve an ultimate goal such as price stability. Such a variable is called a nominal

• A)anchor.
• B)benchmark.
• C)tether.
• D)guideline.

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Definitions:

Proportional Tax

A taxation system where the tax rate remains constant regardless of the amount subject to tax.

Lump-Sum Tax

A tax of a fixed amount that does not vary with the taxpayer's income or activities.

Marginal Tax Rate

The tax rate that applies to the next dollar of taxable income, indicating how much of any additional income will be taken in taxes.

Sales Tax

A consumption tax imposed by the government on the sale of goods and services.