Inflation Targeting Makes More Sense Than Unemployment Targeting,because ________

question 53

Multiple Choice

Inflation targeting makes more sense than unemployment targeting,because ________.

• A)monetary policies affect inflation,not unemployment
• B)expected unemployment is not a key determinant of the unemployment rate
• C)a commitment to avoid high inflation is inherently more credible than a commitment to avoid high unemployment
• D)most voters and most elected officials are more concerned about inflation

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Definitions:

Maximize Profits

The process by which a company seeks to achieve the highest possible financial gain from its operations, often by adjusting production, prices, and costs.

Marginal Revenue

The extra revenue generated by the sale of an additional unit of a product or service.

Marginal Cost

The expense incurred in manufacturing an extra unit of a product or service.

Economic Profits

The difference between total revenue and total costs, including both explicit and implicit costs, indicating excess over the opportunity cost.