Assume a Central Bank Follows a Rule That Requires It

question 23

Multiple Choice

Assume a central bank follows a rule that requires it to take steps to keep the price level constant.If the price level rose because of an increase in aggregate demand and a decrease in aggregate supply that kept output unchanged,then

• A)the central bank would have to decrease the money supply which would decrease output.
• B)the central bank would have to decrease the money supply which would increase output.
• C)the central bank would have to increase the money supply which would decrease output.
• D)the central bank would have to increase the money supply which would increase output.

---

Definitions:

Branding

The process of naming and identifying products.

Trademark

A brand that is registered with the U.S. Patent and Trademark Office and is thus legally protected from use by any other firm.

Sandwich Generation

Those who carry the double responsibilities of taking care of both an elderly relative and their own children.