If the Central Bank Targets the Interest Rate, the Money

question 68

Multiple Choice

If the central bank targets the interest rate, the money:

• A) demand curve is flat.
• B) supply curve is vertical.
• C) supply curve slopes upward.
• D) supply curve is flat.
• E) demand curve is vertical.

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Definitions:

Equivalent Payment

A payment amount that equates the present value of two or more different payments.

Annum

A term denoting a year or a yearly period, often used in financial contexts to refer to annual amounts or periods.

Simple Interest

Interest calculated only on the principal amount, not on the interest that has been added over time.

Repay

The act of paying back money that was borrowed from a person or institution.