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The central banks is not able to completely eliminate the effects of shocks to aggregate demand on output in the model "Monetary policy under commitment and discretion."

Select one:

a. False

b. Uncertain

c. True

No response

Question 6

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Suppose that the consumers in the "political cycles and discretionary monetary policy" model are not interested in the level of inflation. They care about the level of output. Suppose that there are two parties, party A and B. Party A cares more about stability of prices than party B A>B. These parties have above zero winning probabilities A,B>0;A+B=0. Which party would the consumers prefer to be elected?

Select one:

a. All of these answers are correct

b. Party A

c. None of these answers are correct

d. Party B