If the Central Bank Targets a Monetary Aggregate,it Is Likely

question 39

Multiple Choice

If the central bank targets a monetary aggregate,it is likely to lose control over the interest rate because

• A)of fluctuations in the demand for reserves.
• B)of fluctuations in the consumption function.
• C)bond values will tend to remain stable.
• D)of fluctuations in the business cycle.

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets compared to its current liabilities.

Financial Statements

Authorized documents reflecting the economic actions and condition of an organization, individual, or different party, often encompassing the balance sheet, income statement, and cash flow statement.

Common Shares

Equity securities that represent ownership in a corporation, giving shareholders voting rights and a residual claim on corporate earnings in the form of dividends.

Total Equity

Represents the value left in a company after all liabilities have been subtracted from assets, essentially the net assets owned by shareholders.