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If the Fed Were to Tie the Rate of Money

Question 35

Multiple Choice

If the Fed were to tie the rate of money growth to the Consumer Price Index (CPI) , the rate of money growth might be excessive because:


A) The CPI does not measure inflation at the household level
B) Most economists maintain the CPI overstates inflation by 2 to 4 percent annually
C) Most economists maintain the CPI overstates inflation by 1 percent annually
D) Studies suggest that money growth is not related to the CPI

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