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:

Law of Diminishing Returns

The economic principle stating that as more units of a factor of production are incrementally added, the additional output from those units will eventually decrease.

Tenth Hour of Study

A concept in educational psychology indicating the diminishing returns of productivity or learning efficiency after prolonged periods of study.

Productive

Refers to the efficiency and effectiveness with which inputs are transformed into outputs, often measured by the rate of output per unit of input.

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