If the Central Bank Pursues a Monetary Policy That Is

question 15

Multiple Choice

If the central bank pursues a monetary policy that is more expansionary than what firms and people expect,then the central bank must be trying to

• A)boost output in the short run.
• B)constrain output in the short run.
• C)constrain prices.
• D)boost prices in the short run.

---

Definitions:

Equivalent Annual Annuity

The constant annual cash flow for a certain period of time that has the same present value as a series of different cash flows.

Mutually Exclusive

Refers to scenarios where the acceptance of one alternative means the other cannot be chosen.

NPV

NPV (Net Present Value) is a calculation used to assess the profitability of a project or investment by summing the present values of all cash inflows and outflows associated with it.

Replacement Chain Method

A decision analysis for evaluating the replacement of assets, considering the optimal time to replace each asset.