Which of the Following Is Not an Appropriate Policy for a Central

question 40

Multiple Choice

Which of the following is not an appropriate policy for a central bank to follow if the economy is plagued with deflation?

• A)increasing the target interest rate on overnight loans
• B)using expansionary monetary policy to drive down interest rates
• C)consistently pursuing policy to promote the credibility of the central bank
• D)explicitly and credibly targeting inflation
• E)raising the ratio of reserves commercial banks are required to hold

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Definitions:

Jewish Community

A group of people who identify with or practice Judaism, sharing religious, cultural, and often historical ties.

First Nations

Indigenous peoples in Canada who are neither Inuit nor Métis, often associated with specific historical communities or territories.

Multicultural Nation

A country that recognizes, incorporates, and celebrates cultural diversity among its citizens.

Racialization

The method through which communities shape racial categories as genuine, distinct, and inequitable in aspects that are significant to the economic, political, and social spheres.