If the Output Is Too High,to Achieve the Medium Run

question 26

Multiple Choice

If the output is too high,to achieve the medium run equilibrium,the central bank will

• A)increases policy rate.
• B)reduces policy rate.
• C)increase money supply.
• D)increases inflation rate.

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Definitions:

Ordinary Annuity

Homogeneous financial installments disbursed at the cessation of individual periods across a confirmed timeline.

Nominal Interest

The interest rate stated on a loan or investment agreement before any adjustments for compounding or inflation.

Effective Rate

Another term for the effective interest rate, emphasizing its real cost or yield accounting for compounding and other factors.

Compounding Interval

The frequency at which interest is added to the principal of a deposit or loan, affecting the total interest earned or paid.