The central bank wishes to lower the inflation rate from 15% down to 3% by reducing the
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Question:
The central bank wishes to lower the inflation rate from 15% down to 3% by reducing the growth rate in the money supply. The bank announced its intent prior to enacting the policy. By announcing their intent,
I. the decline in the inflation rate will require less time than if the bank had not announced its intent
II. the sacrifice ratio will be greater than if the bank had not announced its intent
a. II is true but not I
b. both I and II are true
c. I is true but not II
d. neither I nor II are true
Related Book For
Macroeconomics
ISBN: 978-0321675606
6th Canadian Edition
Authors: Andrew B. Abel, Ben S. Bernanke, Dean Croushore, Ronald D. Kneebone
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