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1. The Federal Reserve has not formally adopted inflation targeting.
True
False
2. The inflation target, stated or implicit, is usually around 2%.
3. A central bank would lower interest rates to
A. Decrease inflation.
B. Raise unemployment.
C. Stimulate GDP growth
D. All of the above.
4. The Federal Reserve chairman credited with ending the Great Inflation is
A. Ben Bernanke.
B. Alan Greenspan.
C. Paul Volker.
D. None of the above.
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We use percent-changes in the formula for estimating the price elasticity of demand coefficient in order to:
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