The best case for intermediate targeting on monetary aggregates ...

[tiara099]

The best case for intermediate targeting on monetary aggregates is where the
 
  a. LM schedule is flat and the money demand function is stable.
  b. IS schedule is flat and the level of investment is stable.
  c. LM schedule is steep and the money demand function is stable.
  d. IS schedule is steep and the money demand function is stable.

Question 2

Assume that a central bank with a history of inflation announces that it is going to reduce money growth and inflation. According to the rational expectations model, the public will
 
  a. immediately reduce their expected price level and inflation.
  b. reduce their expected price level if this announcement is credible.
  c. reduce their money and real wages if this announcement is credible.
  d. immediately be open to reducing their money wage.
  e. both b and c.

[jointhecircus]

Answer to Question 1

C

Answer to Question 2

E