According to the Keynesian model, a decline in the expected price level
a. will increase the inflation rate a central bank must generate to achieve a target level of unemployment.
b. will decrease the inflation rate a central bank must generate to achieve a target level of unemployment.
c. will not affect the inflation rate a central bank must generate to achieve a target level of unemployment.
d. will not impact the effectiveness of monetary policy.
Question 2
The government significantly raised farm incomes by raising farm prices by: (i) destroying crops, (ii) slaughtering millions of baby pigs and pregnant sows, (iii) paying farmers not to grow crops and (iv) injecting dye into harvested potatoes,
making them inedible. Indicate whether the statement is true or false
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