A Nominal GDP Rule Requires the Fed To

question 236

Multiple Choice

A nominal GDP rule requires the Fed to:

• A) keep the money supply constant.
• B) keep the rate of money growth constant.
• C) adjust the money supply enough to make up for changes in velocity.
• D) adjust interest rates in the opposite direction of real GDP growth.

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Definitions:

Noncontrolling Interest

A stake in a corporation where the shareholder owns less than a majority of the company's shares, without significant control over its strategic decisions.

Equity Method

An accounting technique used by a company to record its investment in another company when it has significant influence but not full control.

Consolidated Financial Statements

Financial statements that present the assets, liabilities, equity, income, expenses, and cash flows of a parent company and its subsidiaries as one single entity.