"Monetary Policy Can Be Described Either in Terms of the Money

question 61

Multiple Choice

"Monetary policy can be described either in terms of the money supply or in terms of the interest rate." This statement amounts to the assertion that

• A)rightward shifts of the money-supply curve cannot occur if the Federal Reserve decides to target an interest rate.
• B)the activities of the Federal Reserve's bond traders are irrelevant if the Federal Reserve decides to target an interest rate.
• C)changes in monetary policy aimed at expanding aggregate demand can be described either as increasing the money supply or as increasing the interest rate.
• D)our analysis of monetary policy is not fundamentally altered if the Federal Reserve decides to target an interest rate.