You Are the Head of the Central Bank and You

question 2

Multiple Choice

You are the head of the central bank and you want to maintain 2 percent long-run inflation. Using the quantity theory of money, if real GDP growth is 4 percent and velocity is constant, you suggest a:

• A) 4 percent money supply growth.
• B) 6 percent interest rate.
• C) 2 percent money supply growth.
• D) 0 percent money supply growth.
• E) None of these answers is correct.

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Definitions:

Neoclassicism

An artistic and decorative style derived from classical antiquity's art and culture, particularly popular in the 18th and early 19th centuries.

Napoleon

A French military and political leader who rose to prominence during the French Revolution and its associated wars, eventually becoming Emperor of the French.

Patriotism

A sense of pride and loyalty towards one's country, often expressed through actions or symbols demonstrating love and commitment to the nation.

Madame de Pompadour

Jeanne-Antoinette Poisson, Marquise de Pompadour, known as Madame de Pompadour, was a member of the French court and the official chief mistress of Louis XV from 1745 to 1751.