If the Central Bank Targets the Money Stock,then a Negative

question 40

Multiple Choice

If the central bank targets the money stock,then a negative shock to money demand will

• A)shift the LM schedule to the right and income will rise above the target level.
• B)shift the LM schedule up and income will fall below the target level.
• C)not shift the LM schedule and,therefore,will not displace income from the target level.
• D)None of the above

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