Which of the Following Monetary Policies Could Reduce the Amplitude

question 49

Multiple Choice

Which of the following monetary policies could reduce the amplitude of oscillations of output around its natural level?

• A)raising interest rates before actual output attains its natural level
• B)lowering interest rates when an economy is still overheated
• C)lowering interest rates when output is above its natural level
• D)all of the above.

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Definitions:

Decision

The act of making a choice among available alternatives.

Postponement

The act of delaying or deferring an action or event to a later time.

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