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© 2014 Pearson Canada Inc.$18.3 Should Price Stability Be the Primary Goal of Monetary Policy?
Hierarchical mandates ____.
A) puts the goal of price stability first and then allows for other goals
B) requires all goals to be met simultaneously
C) is only used by the Bank of Canada
D) is only used by the Federal Reserve
Answer: A
Diff: 1 Type: MC Page Ref: 442
Skill: Recall
Objective List: 18.1 Assess the different types of monetary policy strategy
In the long-run, there is no trade-off between ____ and ____.
A) inflation; unemployment
B) inflation; price stability
C) unemployment; price stability
D) unemployment; economic growth
Answer: A
Diff: 1 Type: MC Page Ref: 442
Skill: Recall
Objective List: 16.1 Summarize the Bank of Canada's balance sheet and the monetary base
Which of the following countries have hierarchical mandates?
A) Reserve Bank of New Zealand
B) Bank of Canada
C) Bank of England
D) all of the above
Answer: D
Diff: 1 Type: MC Page Ref: 442
Skill: Recall
Objective List: 18.1 Assess the different types of monetary policy strategy
Price stability is often the primary goal of central banks. Describe the five other goals of
monetary policy
Answer: The other objectives of monetary policy are: (1) high employment and output stability,
(2) economic growth, (3) stability of financial markets, (4) interest-rate stability, and (5) stability
in foreign exchange markets.
Diff: 1 Type: SA Page Ref: 440
Skill: Recall
Objective List: 18.2 List the advantages and disadvantages of inflation targeting