In General,if a Central Bank Chooses to Target the Money

question 65

Multiple Choice

In general,if a central bank chooses to target the money supply in its implementation of monetary policy,then

• A)the interest rate is determined by monetary equilibrium,and cannot be precisely predicted because of possible shocks to money demand.
• B)the interest rate can be more carefully controlled.
• C)implementation of policy is more straightforward because money supply is more easily controlled than the interest rate.
• D)the interest rate is determined by the Minister of Finance.
• E)the implementation of policy is more straightforward because the central bank can control the process of deposit creation.

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Definitions:

Coping Abilities

An individual's psychological and behavioral capacities to manage stress and adversity.

Tax

A compulsory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Stress

The body's response to any demand or challenge, which can be physical, mental, or emotional.

Defensive Coping Strategies

Psychological tactics employed to protect oneself from stress, anxiety, or emotional pain, often by avoiding reality.