In General,if a Central Bank Chooses to Target the Interest

Multiple Choice

In general,if a central bank chooses to target the interest rate in its implementation of monetary policy,then

A) it is more difficult to communicate this policy to the public than a change in money supply.
B) the central bank can more easily control the process of deposit creation by the commercial banks.
C) the money supply is determined by the Minister of Finance.
D) the implementation of policy is more straightforward because the central bank knows precisely the slope and position of the money demand curve.
E) it conducts the necessary open-market operations to accommodate the resulting change in money demand.