Intermediate targeting the money supply is preferable if there is ...

[tuffie]

Intermediate targeting the money supply is preferable if there is a(n)
 
  a. increase in the severity of supply shocks.
  b. unstable money demand function.
  c. low interest elasticity of money demand.
  d. difficulty in the measurement of money demand.
  e. none of the above.

Question 2

The time consistency problem implies that
 
  A) the central bank should not commit.
  B) central bank commitment is useful.
  C) discretion is better than tying your hands.
  D) there are problems we cannot solve.

[BUTTHOL369]

Answer to Question 1

C

Answer to Question 2

B

[tuffie]

Thank you

[BUTTHOL369]

No problemo