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Figure 13-2 -Figure Above Illustrates an Economy with an Unstable Commodity Demand

Question 79

Multiple Choice

Figure 13-2 Figure 13-2   -Figure above illustrates an economy with an unstable commodity demand and two possible Fed policies, a constant real money supply or a constant interest. Which policy target promotes a stable economy best? A)  constant money supply, A0 to A1 B)  constant money supply, B0 to B1 C)  constant interest rate, A0 to A1 D)  constant interest rate, B0 to B1
-Figure above illustrates an economy with an unstable commodity demand and two possible Fed policies, a constant real money supply or a constant interest. Which policy target promotes a stable economy best?


A) constant money supply, A0 to A1
B) constant money supply, B0 to B1
C) constant interest rate, A0 to A1
D) constant interest rate, B0 to B1

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