If a Country's Central Bank Becomes More Credible and Announces

question 198

Multiple Choice

If a country's central bank becomes more credible and announces a monetary contraction in advance,then:

• A) more firms will invest now before the threat materializes.
• B) slower wages will fall.
• C) wages will rise in anticipation of the fall in incomes.
• D) unemployment costs will be lower.

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Definitions:

Eugene Debs

An American socialist, political activist, trade unionist, and one of the founding members of the Industrial Workers of the World, who ran for U.S. President five times as the candidate of the Socialist Party.

Socialist Cause

A movement or effort dedicated to promoting socialism, which advocates for public or collective ownership and administration of the means of production and distribution of goods.

Mass Consumption

The widespread purchase and use of goods and services by a large portion of the population, often associated with developed economies and the rise of consumer culture.

Department Stores

Large retail establishments that offer a wide variety of goods in different departments under one roof, representing an essential aspect of consumer culture.