Which of the Following Is FALSE

question 22

Multiple Choice

Which of the following is FALSE?

• A)in the long run, a central bank can effectively limit inflation
• B)in the long run, a central bank can do fairly little to stimulate real GDP
• C)in the long run, monetary policy has no effect on nominal GDP
• D)unless inflation is very high, stimulating the economy does more to enhance economic welfare than controlling inflation
• E)a central bank can lower the inflation rate but only by allowing for a loss in real GDP, at least in the short run

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Definitions:

Annually Compounded

Pertaining to the calculation and addition of interest to the principal sum once a year, affecting overall growth.

Successive Years

Consecutive years following one immediately after the other.

Missing Interest Rate

An interest rate that is not specified or known in a financial scenario, which may need to be calculated based on other given information.

Missing Interest Rate

The unknown rate of interest in a financial calculation that needs to be determined.