Which of the Following Characterizes Intermediate Targeting by Central Banks

question 15

Multiple Choice

Which of the following characterizes intermediate targeting by central banks?

• A) the Federal Reserve targets short term interest rates
• B) the European Central Bank targets exchange rates
• C) the Bank of England targets inflation
• D) increasingly, central banks are exclusively targeting the money supply
• E) increasingly, central banks are abandoning the use of explicit targets

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Definitions:

Four-Firm Concentration Ratio

A metric that measures the total market share held by the top four firms within a specific industry, indicating the level of market concentration.

Herfindahl Index

A measure of market concentration used to determine the competitiveness of an industry, calculated by squaring the market share of each firm competing in the market.

Oligopoly

A market structure characterized by a small number of firms that dominate the market, leading to limited competition and potential for collusion.

General Rule

An established guideline or principle that is generally followed or considered as a norm in a particular field or situation.