If the Fed Had to Choose Between Fixing the Interest

question 45

Multiple Choice

If the Fed had to choose between fixing the interest rate and fixing the supply of money,it would

• A)always fix the money supply,so that the price level would be stable
• B)always fix the money supply,so that spending would be stable
• C)always fix the interest rate,so that investment would be stable
• D)always fix the interest rate,so that demand for money would be stable
• E)find neither alternative would be clearly better than the other

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Definitions:

Hockey Skates

Specialized footwear designed for playing hockey, featuring a blade attached to the bottom for gliding on ice.

Exchange Rate

The price at which one currency can be exchanged for another, integral to global commerce and finance.

CAD

Stands for Computer-Aided Design, technology used by designers and engineers to create precision drawings or technical illustrations.

Travel Spending Money

Funds allocated for expenses related to travel, such as meals, accommodation, and transportation, aside from the initial costs of tickets and bookings.