Proponents of Inflation Targeting Generally Think That

question 161

Multiple Choice

Proponents of inflation targeting generally think that

• A)the economy will have fewer, shorter, and less severe business cycles if the Fed holds the rate of inflation to low, targeted levels from year to year.
• B)low interest rates are inflationary and high interest rates are deflationary.
• C)fiscal policy is more effective in stabilizing the economy than monetary policy.
• D)the Fed should strive to achieve zero inflation.

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Definitions:

Direct Benefits

Advantages that directly affect an individual's fitness or survival chances, often used in the context of mate selection where certain traits provide immediate advantages to the chooser.

Indirect Benefits

Advantages that do not directly influence an organism's survival or reproduction but may enhance the survival or reproductive success of its relatives or offspring.

Sexual Selection

A type of natural selection that arises through preference by one sex for certain characteristics in individuals of the other sex.

Reproductive Success

The passing of genes onto the next generation in a way that they too can pass those genes on, a crucial component of natural selection and evolutionary fitness.