Which of the Following Is an Appropriate Policy for a Central

question 85

Multiple Choice

Which of the following is 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 contractionary monetary policy to drive up interest rates
• C)consistently pursuing policy to promote the credibility of the central bank
• D)gradually raising the required reserve rate
• E)sharply increasing the target for the overnight rate

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Definitions:

Alfred C. Kinsey

An American biologist and sexologist known for his research on human sexuality, notably documented in his Kinsey Reports.

Sexual Behaviors

Actions that are related to or encompassing sexual activity, preferences, and orientation.

Bisexual

A sexual orientation characterized by attraction to both men and women, not necessarily to the same degree or in the same way.

Phallic Fallacy

The mistaken belief that bigger male genitalia equates to better sexual prowess or masculinity.