The main goals of monetary policy include all of the following EXCEPT
A) keeping the long term nominal interest rate equal to the real interest rate plus the inflation rate.
B) keeping the inflation rate low.
C) keeping the unemployment rate close to the natural unemployment rate.
D) attaining the maximum sustainable growth of potential GDP.
E) keeping the long-term interest rate at a moderate level.

Question

Quizplus · Accepted Answer

Monetary policy does not aim to keep the long-term nominal interest rate equal to the real interest rate plus the inflation rate. This is more of an identity from the Fisher equation rather than a goal of monetary policy.

The Main Goals of Monetary Policy Include All of the Following