In the event of an increase in aggregate demand the central bank can continue to hit its __________ target by ___________ monetary policy.

Question

Quizplus · Accepted Answer

In the event of an increase in aggregate demand, the central bank can continue to hit its inflation target by tightening monetary policy. This is because an increase in aggregate demand can lead to higher inflation, and tightening monetary policy (such as raising interest rates) can help cool down the economy and keep inflation in check.

In the Event of an Increase in Aggregate Demand the Central