In the New Keynesian Model, the Central Bank's Policy Target

question 41

Multiple Choice

In the New Keynesian model, the central bank's policy target is

• A)aggregate output.
• B)the interest rate.
• C)unemployment.
• D)the money supply.
• E)money demand.

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Definitions:

Alternative Hypothesis

The hypothesis that proposes a difference or relationship exists between two variables, contrasting the null hypothesis.

Population Parameter

A numerical value that represents a characteristic of a population.

Type I Error

The flawed dismissal of an actual null hypothesis, popularly identified as a "false positive."

Power Of The Test

The probability that a statistical test will correctly reject a false null hypothesis, essentially measuring the test's ability to detect an effect if there is one.