If a Central Bank Wants to Make Sure That Its

question 3

Multiple Choice

If a central bank wants to make sure that its policy actions are successful in manipulating interest rates to stabilize the economy around its full-employment level it should

• A)be prepared to make modest and frequent adjustments after receiving feedback on how its actions affect the economy
• B)never announce its intentions, because financial markets will always overreact
• C)frequently change its policies to keep financial markets guessing
• D)react to excess inflation but not to economic booms
• E)all of the above

---

Definitions:

Domestic Violence

A pattern of abusive behavior in any relationship that is used by one partner to gain or maintain control over another intimate partner.

Subculture of Violence

A concept in criminology that suggests certain groups or communities develop norms and attitudes that accept, justify, or glorify violence.

Negative Reference Group

A group an individual does not wish to associate with, often because they embody values or behaviors that are rejected.

Domestic Violence

A pattern of behavior in any relationship that is used to gain or maintain power and control over an intimate partner, encompassing physical, sexual, emotional, economic, or psychological actions.