If a Central Bank Were Required to Target Inflation at Zero,then

question 4

Multiple Choice

If a central bank were required to target inflation at zero,then when there was a positive aggregate supply shock the central bank

• A)would have to increase the interest rate.This would move unemployment closer to the natural rate.
• B)would have to increase the interest rate.This would move unemployment further from the natural rate.
• C)would have to decrease the interest rate.This would move unemployment closer to the natural rate.
• D)would have to decrease the interest rate.This would move unemployment further from the natural rate.

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Definitions:

Procedural Memory

A type of long-term memory for performing specific tasks, not requiring conscious thought for actions or skills learned through repetition.

Explicit Memory

A type of long-term memory involving the conscious recollection of factual information, previous experiences, and concepts.

Korsakoff's Syndrome

A chronic memory disorder often caused by severe deficiency of thiamine (vitamin B1), usually due to long-term alcohol abuse.

Vitamin B-1

Thiamine, known as Vitamin B-1, is essential for glucose metabolism and plays a critical role in nerve, muscle, and heart function.