Which of the Following Is Not an Appropriate Policy for a Central

question 237

Multiple Choice

Which of the following is not an appropriate policy for a central bank to follow if the economy is plagued with deflation?

• A)increasing the target interest rate on overnight loans
• B)using expansionary monetary policy to drive down interest rates
• C)consistently pursuing policy to promote the credibility of the central bank
• D)explicitly and credibly targeting inflation

---

Definitions:

Discriminative Stimulus

A stimulus that signals the availability of reinforcement or punishment, prompting an increase in the likelihood of a specific response.

Cue

A cue is a signal or stimulus that triggers a response or action from an individual or system.

Act Aggressively

describes behavior that is forceful, hostile, or attacking, often with the intention to dominate or intimidate.

Punished Children

Refers to children who have received a form of punishment, potentially as a means of discipline or correction.