If a Central Bank Had to Give Up Its Discretion

question 106

Multiple Choice

If a central bank had to give up its discretion and had to follow a rule that required it to keep inflation low, how would the Phillips curve shift?

• A) The short-run Phillips curve would shift up.
• B) The short-run Phillips curve would shift down.
• C) The long-run Phillips curve would shift right.
• D) The long-run Phillips curve would shift left.

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Definitions:

Growth And Development

The process of physical and psychological change and expansion over the life span of an organism.

Evolutionary History

The chronological narrative of the changes and developments that have occurred in species or organisms over generations, leading to their current states.

Datum

A piece of factual information used as a basis for reasoning, discussion, or calculation.

Grid

A network of intersecting parallel lines, whether imaginary or physical, used for navigation, reference, or as a structural feature in design and planning.