the economics of money, banking, and financial markets

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8. 
   

   Which of the following is the best description of the monetary policy strategy followed by the
   European Central Bank (ECB)?
   A) The ECB follows monetary targeting.
   B) The ECB follows inflation targeting.
   C) The ECB has a hybrid strategy with elements of both monetary targeting and inflation
   targeting.
   D) The ECB has a Fed-like "just do it" approach.
   Answer: C
   Diff: 1 Type: MC Page Ref: 18.1A- 3
   Skill: Applied
   Objective List: 18.1 Assess the different types of monetary policy strategy

   
   


9. 
   

   Which of the following is an advantage to monetary targeting?
   A) There is an immediate signal on the achievement of the target.
   B) It does not rely on a stable money-inflation relationship.
   C) It implies lack of transparency.
   D) It implies smaller output fluctuations.
   Answer: A
   Diff: 1 Type: MC Page Ref: 18.1A- 4
   Skill: Recall
   Objective List: 18.1 Assess the different types of monetary policy strategy

   
   


10. 
    

    Which of the following is an advantage to monetary targeting?
    A) There is almost immediate accountability.
    B) It does not rely on a stable money-inflation relationship.
    C) It implies lack of transparency.
    D) It implies smaller output fluctuations.
    Answer: A
    Diff: 1 Type: MC Page Ref: 18.1A- 4
    Skill: Recall
    Objective List: 18.1 Assess the different types of monetary policy strategy

    
    


11. 
    

    Which of the following is a disadvantage to monetary targeting?
    A) It relies on a stable money-inflation relationship.
    B) There is a delayed signal about the achievement of a target.
    C) It implies larger output fluctuations.
    D) It implies a lack of transparency.
    Answer: A
    Diff: 1 Type: MC Page Ref: 18.1A- 4
    Skill: Recall
    Objective List: 18.1 Assess the different types of monetary policy strategy