In 2018, several European couptries were faced with the problem of increasing intation At the same time, unemployment was low, which led to an inorease in real wages If the European central Bank (ECB) wanted to cut inflation, which of the following would do i? Explain your answer. (Check all that apply) OA. H the interest rate is decreased, money will become more expensive: therefore, infiation will eventualy get lower. OB. Ha Central Bank sols govemmental bonds, then the money in the economy is decreased and money gets more expensive countering infalion OC. if the required reserves ratio is decreased, banks wil have more money, leading to lower inflation OD. If the interest rate is increased, money will become more expensive: thorefore, infation will evertualy get lowet DE. Ifa Contral Bank sells govemmental bonds, then the money in the economy is increased and monny gnts more expersive courtering inflation

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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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.
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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