Which of the Following Policies Is Likely to Enhance a Central

question 37

Multiple Choice

Which of the following policies is likely to enhance a central bank's credibility?

• A) announce inflation targets.
• B) appoint inflation doves as central bankers.
• C) make the central bank obligated to finance the national deficit.
• D) appoint central bankers for short terms that coincide with those in the legislative and executive branches of government.

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Definitions:

Financial Position

A snapshot of the resources a company owns, as well as the claims against those resources at a specific point in time.