With Nominal GDP Targeting, the Central Bank

question 43

Multiple Choice

With nominal GDP targeting, the central bank

• A)always tries to keep the economy at its full-employment level by keeping actual inflation close to expected inflation
• B)always adjusts money supply even if there is only a temporary shift in aggregate demand
• C)never makes adjustments in money supply even under extreme circumstances
• D)is willing to risk an inflationary bias in its policy to maintain full employment
• E)none of the above