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

question 237

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

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Definitions:

Task Leadership

The aspect of leadership focused on goal attainment and the operational aspects of a group or organization, emphasizing the completion of tasks.

Social Leadership

A style of leadership that emphasizes collaboration, relationship-building, and community-oriented decision-making.

High

A state of altered consciousness often induced by drugs, characterized by euphoria, increased energy, or distortions in perception.

Low

Characterized by or situated at a small or relatively smaller position in hierarchy or scale.