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.

---

Definitions:

After-Tax Net Present Value

A financial calculation that evaluates the profitability of an investment or project after accounting for taxes, presenting the difference between the present value of cash inflows and outflows.

Depreciation

The distribution of a physical asset's cost across its lifespan, mirroring its depreciation over time.

Operating Costs

Expenses associated with the day-to-day activities of a business, including costs of goods sold and administrative expenses.

Profitability Index

An investment appraisal technique that calculates the relationship between the costs and benefits of a project by dividing the present value of future cash flows by the initial investment cost.