To Set the Target Interest Rate, Central Banks Need to Know

Multiple Choice

To set the target interest rate, central banks need to know the size of the output gap.This requires measuring:

A) Only the level of current gross domestic product
B) Only the levels of current gross domestic product and potential gross domestic product
C) Not only the levels of current gross domestic product and potential gross domestic product but also their growth rates
D) Only the growth rates of current gross domestic product and potential gross domestic product