If the central bank is facing the zero bound constraint and announces a higher inflation target,

A) the real interest rate will increase, which will decrease aggregate expenditure.
B) the real interest rate will decrease, which will increase aggregate expenditure.
C) the nominal interest rate will increase, which will decrease aggregate expenditure.
D) the nominal interest rate will decrease, which will increase aggregate expenditure.


B

Economics

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A) relatively predictable; relatively predictable B) relatively predictable; relatively unpredictable C) relatively unpredictable; relatively predictable D) relatively unpredictable; relatively unpredictable

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Which combination of assets represents the most diversification?

A) holding corporate and Treasury bonds B) holding shares of Google and Yahoo C) holding shares of Google and Microsoft D) holding shares of Google along with Treasury bonds

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Economics