If the money supply increases at the same time that taxes increase, then:
a. interest rates will definitely increase.
b. interest rates will definitely decrease.
c. income will definitely increase.
d. income will definitely decrease.
Question 2
An index constructed by Alberto Alesina and Lawrence Summers measuring central bank independence for a sample of industrialized countries during the late 1980s notes that the
a. most countries have completely independent central banks.
b. countries with less independent central banks had lower inflation rates.
c. the most independent central banks were those of Switzerland and Germany, followed by theU.S. Federal Reserve.
d. there has been a trend away from central bank independence among countries
e. both c and d
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