Suppose the Monetary Authority Sets a Target of 1% to 2

question 216

Multiple Choice

Suppose the monetary authority sets a target of 1% to 2% inflation per year. If the economy experiences deflation, the appropriate monetary policy is

• A) a contractionary monetary policy.
• B) no change to monetary policy.
• C) a quantitative easing.
• D) a balanced budget.

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Definitions:

Religious Rituals

Ceremonies or practices performed in accordance with the beliefs of a religion.

Superstitious Behavior

Actions performed based on irrational beliefs that certain outcomes can be influenced by specific, unrelated behaviors.

Freud

Sigmund Freud was an Austrian neurologist and the founder of psychoanalysis, a method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Obsessive-compulsive Disorders

Mental illnesses marked by an individual's engagement in repetitive thoughts and behaviors that are performed to alleviate anxiety or distress.