If the Central Bank Cannot Commit,then

question 20

Multiple Choice

If the central bank cannot commit,then

• A) the inflation rate is higher than with commitment, but aggregate output is the same.
• B) money is neutral in the short run.
• C) the inflation rate is higher than with commitment, and aggregate output is lower.
• D) the central bank can permanently increase the quantity of real output.

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Definitions:

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INDEX Function

A function in spreadsheet software like Excel that returns the value of an element in a table or array, selected by the row and column number indexes.

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