If the Fed Has Discretion to Choose Its Own Policy

question 9

Multiple Choice

If the Fed has discretion to choose its own policy and announces a policy of low inflation, then:

• A) the policymaker is required to make the money supply grow at a low rate.
• B) private economic agents are sure to believe the announcement because it is credible.
• C) private economic actors are likely to discount the policy because the Fed has an incentive to renege on its policy once expectations are formed.
• D) the Fed is certain to renege on its policy once expectations are formed because then it can lower unemployment with minimum inflation.

Comprehend memory types and features relevant to data integrity and performance.

Diagnose common hardware issues based on system error messages.

Understand data storage configurations for performance and redundancy.

Use specialized tools for network and hardware troubleshooting.

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Definitions:

Substitute Goods

Products or services that can replace or substitute each other in use, where an increase in the price of one leads to an increase in demand for the other.

Supply Curve

A graphical representation that shows the relationship between the price of a good and the quantity supplied, illustrating how changes in price influence supplier behaviour.

Supply Curve

A graphical depiction that shows the relationship between the price of a good or service and the quantity of that good or service that suppliers are willing and able to provide, at given prices.

Supply Curve

A graphical representation showing the relationship between the quantity of goods that producers are willing to sell and the price of those goods.