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

question 12

Multiple Choice

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

• A)it is more difficult to communicate this policy to the public than a change in money supply.
• B)the central bank can more easily control the process of deposit creation by the commercial banks.
• C)the money supply is determined by the Minister of Finance.
• D)the implementation of policy is more straightforward because the central bank knows precisely the slope and position of the money demand curve.
• E)it conducts the necessary open-market operations to accommodate the resulting change in money demand.

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Definitions:

Audience Relationship

The connection and interaction between the speaker, writer, or creator and their audience, crucial for effective communication.

Negative News

Information or messages that convey unfavorable, disappointing, or unpleasant content, which may require careful communication to manage its impact.

Direct Approach

A method of communication where the main point or request is stated outright at the beginning, often used in business and professional writing.

Efficiency

The ability to accomplish a task or produce a desired outcome with the least waste of time and effort.