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:

Market Share

The segment of a market dominated by a specific company or product.

Acquiring Firm

A company that purchases or takes control of another company through a merger, acquisition, or takeover.

Proxies

Proxies are documents authorizing a person to vote on another shareholder's behalf during a company's shareholder meeting.

Takeover

The acquisition of one company by another, in which the acquiring company obtains majority control over the targeted firm.