One Difficulty in Attempting to Stabilize the Economy by Controlling

question 95

Multiple Choice

One difficulty in attempting to stabilize the economy by controlling the money supply is that

• A)firms may be sensitive to changes in the rate of interest.
• B)the Canadian government requires long- term loans.
• C)the commercial banks may choose not to hold excess reserves.
• D)the money demand function may be unstable.
• E)the Bank of Canada can print more money.

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Luddite

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