All of the Following Are Ways to Enhance Central Bank

question 31

Multiple Choice

All of the following are ways to enhance central bank credibility EXCEPT to:

• A) announce inflation targets.
• B) appoint inflation hawks as central bankers.
• C) put no obligation on the central bank to finance the national deficit.
• D) make central bank actions subject to frequent review and veto by the executive and legislative branches of government.

Understand the concept of monopolistic competition and how it differs from other market forms.

Recognize the role and arguments for and against advertising in monopolistically competitive markets.

Identify the strategies monopolistically competitive firms use to gain market power and differentiate their products.

Comprehend the importance of product differentiation and the forms it can take (horizontal and vertical).

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Definitions:

Pricing Strategies

Various approaches businesses use to set prices for their products or services to maximize profitability and meet market demand.

Perishable

Describes products or services that have a limited life span or expiry date, after which they are no longer usable or valuable.

Empowerment Gap

The disparity between groups in their access to resources and opportunities that allow for empowerment and decision-making.

Service Gap

Results when a service fails to meet the expectations that customers have about how it should be delivered.