Multiple Choice
If a central bank were required to target inflation at zero,then when there was an unanticipated decrease in aggregate demand the central bank
A) would have to increase the money supply.This would move unemployment closer to the natural rate.
B) would have to increase the money supply.This would move unemployment further from the natural rate.
C) would have to decrease the money supply.This would move unemployment closer to the natural rate.
D) would have to decrease the money supply.This would move unemployment further from the natural rate.
Correct Answer:

Verified
Correct Answer:
Verified
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