Nominal GDP Targeting Implies That

question 37

Multiple Choice

Nominal GDP targeting implies that

• A)there is an implicit monetary policy tradeoff between inflation and unemployment
• B)the Fed will never have to adjust its monetary targets even if there is a shift in money demand
• C)the Fed will never have to make adjustments in its money stock targets as disturbances hit the economy
• D)the desire to maintain full employment outweighs any risk of an inflationary bias
• E)none of the above

---

Definitions:

NPV

Net Present Value, a calculation used to determine the present value of a series of future cash flows by discounting them at a specific rate.

Cash Flows

The total amount of money being transferred into and out of a business, particularly concerning its operating, investing, and financing activities.

Interest Rate

The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.

Capital Budget

An estimate of the major capital and investment expenditures over a period, and the means of financing them.