Assuming Short-Run Sticky Prices, the Same Monetary Policy Result May

question 159

Multiple Choice

Assuming short-run sticky prices, the same monetary policy result may be achieved by targeting the money supply or the nominal rate of interest whenever:

• A) the demand for money is stable.
• B) interest income is not taxable.
• C) changes in the supply of money are small and predictable.
• D) real income is constant.

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Definitions:

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