If Prices and Wages Were Perfectly Flexible and Congress Had

question 109

Multiple Choice

If prices and wages were perfectly flexible and Congress had control over central bank decisions, Congress would have

• A)no political incentive to adjust the target rate of inflation.
• B)a long-run incentive to lower the target rate of inflation.
• C)a short-run incentive to raise the target rate of inflation.
• D)a short-run incentive to lower the target rate of inflation.
• E)a long-run incentive to raise the target rate of inflation.

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Definitions:

Null Hypothesis

A hypothesis in statistical analysis that suggests no significant difference or effect; it's the default position that there is no association between two measured phenomena.

Mean Square

A statistical measure used particularly in ANOVA, calculated by dividing the sum of squares by its degrees of freedom.

Error

The discrepancy between the actual measurement and its real value.

Mean Square

A statistical measure of the average of squared differences from the mean, used in various analyses like variance and ANOVA.