With nominal GDP targeting, the central bank
A) always tries to keep the economy at its full-employment level by keeping actual inflation close to expected inflation
B) always adjusts money supply even if there is only a temporary shift in aggregate demand
C) never makes adjustments in money supply even under extreme circumstances
D) is willing to risk an inflationary bias in its policy to maintain full employment
E) none of the above
Correct Answer:
Verified
Q40: The macroeconomic forecast of the Congressional Budget
Q41: Nominal GDP targeting implies that
A)there is an
Q42: If a central bank employs policies that
Q43: If a central bank targets inflation, then
A)it
Q44: If we have a loss function that
Q45: If a central bank targets inflation, then
A)a
Q47: The temptation to engage in dynamic inconsistency
Q48: The Fed should be much more independent
Q49: The concept of dynamic inconsistency implies that
Q50: A central bank that is independent of
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