When a Central Bank Sets a Target for the Interest

question 144

Multiple Choice

When a central bank sets a target for the interest rate, it commits itself to which of the following?

• A)revealing its target to the public
• B)adjusting the demand for money in order to make the equilibrium in the money market hit that target
• C)adjusting the money supply in order to meet the interest rate target
• D)having to make open-market sales

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Definitions:

Overtime Pay

Additional compensation provided to employees who work beyond the standard hours prescribed by their contract or work regulation.

Assembly Line

An assembly line is a manufacturing process in which parts are added to a product in a sequential manner to create a finished product efficiently.

Idle

A state of inactivity or not being in use, often referring to machinery or workers.

Busy

Engaged in action or occupied with activities, often implying a lack of spare time.