An interest rate and a money aggregate cannot be controlled at the same time.

Name: An interest rate and a money aggregate cannot be controlled at the same time.
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Question

Quizplus · Accepted Answer

This is because controlling the money supply directly influences interest rates, and vice versa, due to the liquidity preference and money supply relationship in the economy. Central banks typically choose to target one variable (interest rate or money supply), as targeting both simultaneously can lead to policy conflicts.

An Interest Rate and a Money Aggregate Cannot Be Controlled