If a Central Bank Were Required to Target Inflation at Zero,then

question 2

Multiple Choice

If a central bank were required to target inflation at zero,then when there was a negative aggregate supply shock the central bank

• A)would have to increase the money supply.This would move unemployment closer to the natural rate.
• B)would have to increase the money supply.This would move unemployment further from the natural rate.
• C)would have to decrease the money supply.This would move unemployment closer to the natural rate.
• D)would have to decrease the money supply.This would move unemployment further from the natural rate.

---

Definitions:

Strategic Suggestions

Recommendations proposed with careful planning and consideration to achieve a specific goal or solve a problem, often within a business or competitive context.

Revise

The process of reviewing and amending documents or drafts to correct, improve, or update them.

Spell-check

A feature or tool in word processing software that checks for and indicates spelling errors in a text.

Grammar-check

The process of reviewing written text to ensure it adheres to rules of grammar and is free of errors.