A problem with focusing on the CPI as the measure of inflation when conducting monetary policy is that... O a. The CPI distorts the value of commercial bank reserves. O b. The CPl is too stable to reflect accurately the changes occurring in the Canadian economy. O c. Many elements in the CPI change for reasons unrelated to the state of the Canadian economy. O d. It is closely related to the value of M2. O e. Changes in monetary policy have little effect on the CPI, especially in the long run. Suppose legislation required the government to balance its budget annually. With regard to real GDP, this rule would be... a. Stabilising because it smooths out the peaks and troughs of the business cycle. O b. Destabilising because the fiscal year is longer than the business cycle. O c. Stabilising because it allows greater flexibility in the design of fiscal policy. O d. Destabilising because fiscal policy is then procyclical. O e. Stabilising in most circumstances.

A problem with focusing on the CPI as the measure of inflation when conducting monetary policy is that... O a. The CPI distorts the value of commercial bank reserves. O b. The CPl is too stable to reflect accurately the changes occurring in the Canadian economy. O c. Many elements in the CPI change for reasons unrelated to the state of the Canadian economy. O d. It is closely related to the value of M2. O e. Changes in monetary policy have little effect on the CPI, especially in the long run. Suppose legislation required the government to balance its budget annually. With regard to real GDP, this rule would be... a. Stabilising because it smooths out the peaks and troughs of the business cycle. O b. Destabilising because the fiscal year is longer than the business cycle. O c. Stabilising because it allows greater flexibility in the design of fiscal policy. O d. Destabilising because fiscal policy is then procyclical. O e. Stabilising in most circumstances.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

What is the Inflation factor?
how purchasing power is elaborated in economics through budget lines
Evaluate the impact of age, and geographic location on personal income.
how much a person or family earns in any given period is called
Inflation rate for the developed country (New Zealand).
Inflation rate between each year what kind of measurement is this?
Personal income includes income received in the form of transfer payments True False
why Gross domestic savings (% of GDP) impact to Secondary education in a country ?
Meation 5 Developing country
05 Financial institutions Multiple Choice promote innovation and new products. collect fees from small businesses. match Angel investors with Small Business Administration loans. collect income tax revenue.