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If Most Disturbances in Our Economy Are Coming from the Expenditure

Question 48

Multiple Choice

If most disturbances in our economy are coming from the expenditure sector, the Fed should


A) buy government securities whenever interest rates go up to keep income stable
B) sell government securities whenever interest rates go up to keep interest rates stable
C) follow money supply targets rather than interest rate targets
D) follow interest rate targets rather than money supply targets
E) change reserve requirements more frequently

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