If the central bank targets the interest rate, it
a. must decrease interest rates in response to an increase in money demand.
b. rules out the possibility of runaway inflation.
b. can lead to runaway inflation if maintained too rigidly.
d. Both a and c
e. Both b and c
B
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Explain how an increased federal budget deficit resulting from a recession can actually help stabilize an economy
What will be an ideal response?
Innovation in the U.S. was spurred by:
a. a free high school education in the U.S. b. an influx of capable immigrants c. an inexpensive patent system d. All of the above are correct.
Under a gold standard, a discovery of gold will
a. decrease the general price level. b. increase the general price level. c. cause increased unemployment. d. cause decreased rates of economic growth.
An increase in the marginal income tax rate will increase the quantity of labor supplied.
Answer the following statement true (T) or false (F)