ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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In 2018, several European countries wero faced with the problem of increasing intation At the same time, unemployment was low, which led to an increase in real wages
If the European central Bank (ECB) wanted to cut inflation, which of the following would do i? Explain your answor, (Check all that apply)
O A. If the interest rate is decreased, money will become more expensive, therefore, infiation will eventualy get lower.
B. Ifa Central Bank solls govermmental bonds, then the money in the economy is decreased and money gets more expensive countering infation
C. If the required reserves ratio is decreased, banks will have more money, leading to lower inflation
D. If the interest rate is increased, money will become more expensive: therefore, infation will eventualy get lower
DE. Ifa Central Bank sels governmental bonds, then the money in the economy is increased and monoy gets more expersive countering inflation.
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Transcribed Image Text:In 2018, several European countries wero faced with the problem of increasing intation At the same time, unemployment was low, which led to an increase in real wages If the European central Bank (ECB) wanted to cut inflation, which of the following would do i? Explain your answor, (Check all that apply) O A. If the interest rate is decreased, money will become more expensive, therefore, infiation will eventualy get lower. B. Ifa Central Bank solls govermmental bonds, then the money in the economy is decreased and money gets more expensive countering infation C. If the required reserves ratio is decreased, banks will have more money, leading to lower inflation D. If the interest rate is increased, money will become more expensive: therefore, infation will eventualy get lower DE. Ifa Central Bank sels governmental bonds, then the money in the economy is increased and monoy gets more expersive countering inflation.
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