Under a Nominal GDP Targeting Rule, the Central Bank

question 30

Multiple Choice

Under a nominal GDP targeting rule, the central bank

• A) must publish its expected inflation rate.
• B) lowers its interest rate when nominal GDP falls below target.
• C) loses its ability to influence the inflation rate.
• D) changes the interest rate only when real GDP, and hence nominal GDP, is off target.
• E) cannot use short-term interest rates to conduct monetary policy.

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Definitions:

Area Chart

A type of graph that represents quantities through the use of filled areas between lines and a baseline, often used to track changes over time.

Bar Charts

A visual depiction of information utilizing bars that vary in height or length to contrast values among categories.

Chronologically

Arranging events in the order of their occurrence in time.

Pie Charts

A circular graph divided into slices to illustrate numerical proportions.