Which of the following statements is least likely to be true?
A) By targeting the growth in the money supply, the government will be more successful in keeping inflation low if the demand for money becomes volatile.
B) Targeting the growth in the money supply will be more successful in keeping inflation low if the velocity of money is stable.
C) The demand for money influences the velocity of money.
D) A rules-based approach to monetary policy will be less effective when the demand for money is volatile.
E) A rules-based approach to monetary policy will be less effective when the velocity of money is volatile.
Correct Answer:
Verified
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