Which of the Following Statements Is Correct with Respect to Monetary

question 46

Multiple Choice

Which of the following statements is correct with respect to monetary policy?

• A) Targeting the money supply is likely to be more successful when the demand for money is volatile.
• B) When the velocity of money is stable, targeting the money supply is likely to be completely ineffective.
• C) Interest rates will always be stable if the central bank keeps the growth in the money supply stable.
• D) Australia's very high rates of inflation in the early 1970s lead to the monetary targeting in terms of the growth of the monetary aggregate, M3.

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