When money-demand shifts are the predominant disturbance
A) the interest rate depends on the position of the IS curve.
B) the interest rate will be more volatile with an interest-rate target than with a money-supply target.
C) the interest rate will be more volatile with a GDP target than with a money-supply target.
D) a rigid money-supply target will allow the interest rate to respond to shifts in demand for money.
D
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Which of the following is true about an individual's choice of insurance assuming state-independent tastes?
A. Full insurance will be chosen from a full menu of actuarily fair insurance if tastes are risk averse. B. No insurance will be chosen if the menu of insurance contracts is actuarily unfair and tastes are risk averse. C. No insurance will be chosen if the menu of insurance contracts is actuarily unfair and tastes are risk-neutral. D. (a) and (b) are true. E. (a) and (c) are true. F. (b) and (c) are true. G. All of the above. H. None of the above
In and Edgeworth Box economy, no one strictly prefers the endowment allocation to the competitive equilibrium allocation.
Answer the following statement true (T) or false (F)
In the above figure, if the budget line shifts from RT to RS, the substitution effect is illustrated by the move from
A) a to b. B) a to c. C) b to c. D) T to S.
If a person withdraws $500 from his/her savings account and puts it in his/her checking account, then M1 will ________ and M2 will ________
A) not change; not change B) not change; increase C) increase; not change D) not change; decrease E) increase; decrease