When Money-Demand Shifts Are the Predominant Disturbance

question 10

Multiple Choice

When money-demand shifts are the predominant disturbance

• A)the interest rate depends on the position of the IS curve.
• B)the interest rate will be more volatile with an interest-rate target than with a money-supply target.
• C)the interest rate will be more volatile with a GDP target than with a money-supply target.
• D)a rigid money-supply target will allow the interest rate to respond to shifts in demand for money.

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Definitions:

Object Permanence

The understanding that objects continue to exist even when they cannot be observed (seen, heard, touched, smelled, or sensed in any way).

Practice

The repeated exercise or performance of an activity or skill so as to acquire or maintain proficiency in it.

Perseveration

is the repetition of a particular response, such as a word, phrase, or gesture, despite the absence or cessation of a stimulus.

Infant's Tendency

Refers to the natural inclinations or predispositions observed in infants, such as tendencies toward certain behaviors or reactions.