REFERRING TO FIGURE 18-2, IF THE CENTRAL BANK WISHES TO KEEP THE I...

37) - TEST BANK CHAPTER 18 CONDUCT OF MONETARY POLICY GOALS AND TARGETS TÀI CHÍNH TIỀN TỆ
TEST BANK CHAPTER 18 CONDUCT OF MONETARY POLICY GOALS AND TARGETS TÀI CHÍNH TIỀN TỆ
37) Referring to Figure 18-2, if the central bank wishes to keep the interest rate at the target value i

*

, it must (a) increase the money supply to M

s

′′

when money demand increases to M

d

′′

. (b) allow the interest rate to increase when money demand increases. (c) hold the money supply constant at M

s*

when money demand falls to M

d′

. (d) allow the interest rate to decrease when money demand decreases. (e) none of the above. Answer: A Question Status: New