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Which of the Following Statements Is Most Accurate

Question 48

Multiple Choice

Which of the following statements is most accurate?


A) Monetary policy set to achieve money supply targets best insulates GDP from random shifts in the IS curve.
B) Monetary policy set to achieve an interest rate target best insulates GDP from random shifts in the LM curve.
C) Monetary policy set to achieve a money supply target represents a compromise that insulates GDP from simultaneous random shifts in both the IS curve and the LM curve.
D) All of the above.
E) Only a and b.

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