If Central Bank a Cares Only About Keeping the Price

question 72

Multiple Choice

If Central Bank A cares only about keeping the price level stable and Central Bank B cares only about keeping output at its natural level, then in response to an exogenous decrease in the velocity of money:

• A) both Central Bank A and Central Bank B should increase the quantity of money.
• B) Central Bank A should increase the quantity of money whereas Central Bank B should keep it stable.
• C) Central Bank A should keep the quantity of money stable whereas Central Bank B should increase it.
• D) both Central Bank A and Central Bank B should keep the quantity of money stable.

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Definitions:

Theoretically Diverse

Pertaining to or involving a variety of theories, methods, or ideas in a particular field of study or practice, recognizing the value of different perspectives.

Behavioural Genetics

The field of study that examines the role of genetic and environmental influences on animal (including human) behavior.

Family Environment

The social and emotional atmosphere in which a person is raised, including family dynamics, relationships, and cultural practices.

Behavioural Genetics

The academic discipline that investigates the impact of genetics and environmental factors on behavioral patterns.