14) Which of the following is a likely objective of monetary policy? A) Achievin

ID: 1098863 • Letter: 1

Question

14) Which of the following is a likely objective of monetary policy?

A) Achieving a zero inflation gap

B) Stabilizing economic activity

C) avoiding large changes in unemployment

D) all of the above

E) none of the above

15) When an aggregate demand shock hits the economy ________.

A) there is no conflict for the central bank between pursuing price or output stability because of the divine coincidence

B) the same long-run equilibrium real interest rate is reached whether the central bank intervenes or not

C) the long-run level of output is unaffected

D) all of the above

E) none of the above

16) According to the Taylor rule, which of the following will lead to a higher nominal federal funds rate?

A) a decrease in inflation

B) a negative output gap

C) a positive inflation gap

D) all of the above

15 E)none of the above

16. A) there is no conflict for the central bank between pursuing price or output stability because of the divine coincidence

17.C) a positive inflation gap

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