A Central Bank That Chooses a Large Value Of $\theta$ _$\pi$

question 16

Multiple Choice

A central bank that chooses a large value of $\theta$ _$\pi$ , the responsiveness of nominal interest rates to inflation, and a small value of $\theta$ _Y, the responsiveness of nominal interest rates to output, is choosing to obtain less _____ at the expense of more _____.

• A) inflation; output
• B) output; inflation
• C) inflation variability; output variability
• D) output variability; inflation variability

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Definitions:

Specific Group

A defined set of individuals or entities distinguished by certain shared characteristics or criteria.

Constitutes Offense

Defines or establishes the act or actions considered to be a violation of law or rules.

Modified Comparative Negligence

In some states, a defense whereby the defendant is not liable for the percentage of harm that he or she proves can be attributed to the plaintiff's own negligence if the plaintiff's negligence is responsible for less than 50 percent of the harm. If the defendant establishes that the plaintiff's negligence caused more than 50 percent of the harm, the defendant has no liability.

Fault Percentage

The degree of responsibility, expressed as a percentage, attributed to each party in a legal dispute.