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Other Nominal Anchors or Targets, Such as Rules for Monetary

Question 148

Multiple Choice

Other nominal anchors or targets, such as rules for monetary growth, sometimes fail to optimize economic conditions in the short run because:


A) monetary growth rates are unrelated to inflation.
B) it is complicated to figure out how to hold down money creation.
C) corrupt politicians pay no attention and give out extra currency to political supporters.
D) low monetary growth may curb inflation but may also constrain growth of real income.

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