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If the Central Bank Targets the Money Supply,it Will

Question 27

Multiple Choice

If the central bank targets the money supply,it will


A) provide increased liquidity when the demand for money rises
B) raise interest rates to encourage lending whenever banks hold excess reserves
C) conduct open market sales of securities whenever the demand for money falls
D) allow interest rates to rise when the demand for money rises
E) not act to offset credit tightening by banks

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