Assume that the Fed's goal is to stabilize national income.Under what conditions would a money supply target be more desirable than an interest rate target?
A) when money demand is very interest inelastic and investment is very interest elastic
B) when money demand is very interest elastic and investment is very interest inelastic
C) when consumer spending is very predictable
D) when uncertainties and fluctuations are coming mainly from the expenditure sector
E) when uncertainties and fluctuations are coming mainly from changes in money demand
Correct Answer:
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