If the Fed Were Required to Maintain an Absolutely Constant

question 37

Multiple Choice

If the Fed were required to maintain an absolutely constant growth rate of high-powered money,then the growth rate of the money supply

• A)would be zero.
• B)would be constant at the growth rate of H.
• C)would be constant but not necessarily at the growth rate of H.
• D)would fluctuate along with the parameters in the money-creation formula.

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