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If the Inflation Rate Starts to Increase, a Central Bank

Question 23

Multiple Choice

If the inflation rate starts to increase, a central bank most likely will


A) try to stimulate aggregate supply through open market purchases
B) change short-term interest rates though open market sales
C) increase short-term interest rates by buying government bonds
D) send signals to financial markets about upcoming open market purchases
E) ask banks to ration credit

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