Exam 23: Six Debates Over Macroeconomic Policy: Should the Central Bank Aim for Zero Inflation

If inflation were high in some country and lawmakers in that country passed a law requiring the central bank to maintain a low level of inflation,it is likely that

A permanent reduction in inflation would

Some economists argue that since inflation

Higher inflation results in

Proponents of zero inflation argue that a successful program to reduce inflation

An economist would be more likely to argue against reducing inflation if she thought that

Economists

Which of the following is a cost of inflation?

A program to reduce inflation is likely to have higher costs if the sacrifice ratio is

Some countries have had high inflation for a long time.Others have had low or moderate inflation for a long time.Which of the following,at least in theory,could explain why some countries would continue to have high inflation?

For the Fed to fully eliminate the costs of inflation,how low does the inflation rate need to be?

Which costs of inflation could the government reduce without reducing inflation?

An economist advising a central bank intending to reduce the inflation rate would likely point out that

If the public correctly perceives that the central bank will reduce inflation,then

Which of the following is not a cost of inflation identified by economists?

If a central bank were required to target inflation at zero,then when there was an unanticipated decrease in aggregate demand the central bank

Demand for workers in some industry declines.These workers are reluctant to have a cut in their nominal wage.However,

An individual would suffer lower losses or maybe even gain from an unexpectedly higher inflation rate if

Which costs of inflation could the government take action to reduce without reducing inflation?

Zero inflation