The Credibility of the Central Bank

question 24

Multiple Choice

The credibility of the central bank:

• A) promotes long-run growth.
• B) is irrelevant for controlling inflation.
• C) is crucial for controlling inflation and stabilizing output.
• D) promotes sensible fiscal policy.
• E) implies low interest rates.

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Definitions:

Sales Returns

Goods returned to the seller by the buyer after the sale, leading to a reduction in sales revenue.

Discount Period

The timeframe within which a buyer can make payment less a discount for early settlement, encouraging quicker payment from customers.

Operating Expense Section

A part of the income statement that lists expenses related to the day-to-day operations of a business, excluding the cost of goods sold.

Wholesaler

An intermediary entity in the distribution channel that buys goods in bulk from manufacturers and sells them to retailers or other businesses, but not directly to consumers.