Monetary Policy in Flosserland

question 38

Multiple Choice

Monetary Policy in Flosserland

In Flosserland, the Department of Finance is responsible for monetary policy. Flosserland has had an inflation rate of 25% for many years.

-Refer to Monetary Policy in Flosserland.Suppose that the Flosserland Department of Finance undertakes a public relations campaign to convince people that it will soon change monetary policy to reduce inflation to 12.5%.If Flosserlanders believe their government then which,if any,curve(s) shift left?

• A)the short-run and the long-run Phillips curve
• B)the short-run but not the long run Phillips curve
• C)the long-run but not the short-run Phillips curve
• D)neither the short-run nor the long-run Phillips curve

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Definitions:

Stock Options

Rights to buy a certain number of shares of stock at a specified price.

Pension Plans

A type of retirement plan where an employer contributes funds to a pool of money set aside for an employee's future benefit, typically based on years of service and salary.

Performance Feedback

The process through which employees receive information about their job performance from their supervisors, peers, or other sources.

Pay Structure

The pay policy resulting from job structure and pay level decisions.