What actions could the central bank take to achieve consistent growth in real GDP at 4 percent per year?
A) The central bank could increase in the growth rate of the money supply by 1% each year until the inflation rate was exactly equal to 4 percent.
B) The central bank could follow contractionary monetary policy that would reduce the overnight rate to zero so investment will rise consistently.
C) The central bank has no direct control over real GDP in the long run, so there are no actions it could take to achieve that goal.
D) The central bank could maintain a growth rate of the money supply of 4 percent, regardless of whether inflation was rising or falling in the economy.
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