If a Central Bank Had to Give Up Its Discretion

question 26

Multiple Choice

If a central bank had to give up its discretion and follow a rule that required it to keep inflation low,

• 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:

Diagnostic Blood Test

A medical test performed on a blood sample to determine the presence of diseases, conditions, or infections.

Carbon Dioxide

A gas that is both colorless and odorless, created through the combustion of carbon and organic materials as well as during the process of respiration, which is then utilized by plants during photosynthesis.

Erythrocyte

A red blood cell, responsible for carrying oxygen throughout the body.

Erythropoiesis

The process through which new red blood cells are produced in the bone marrow, a critical process for maintaining adequate oxygen transport in the blood.