If a Central Bank Follows an Activist Monetary Policy Rule

question 47

Multiple Choice

If a central bank follows an activist monetary policy rule,

• A)full employment can always be maintained with little or no inflation
• B) financial markets always need advance notice of any policy change so the central bank does not lose its credibility
• C)the focus is generally on expected future economic conditions while current economic conditions are ignored
• D)the focus is generally on the long-run inflation rate with little concern about unemployment
• E)none of the above

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