Economics · Monetary Economics
If the demand for money is interest-inelastic and perfectly stable, then by targeting the money supply, the central bank:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1makes the LM schedule slope downwards.
- 2makes the LM schedule depend on varying income.
- 3fixes the interest rate and makes income flexible.
- 4fixes the vertical LM schedule and income at that level.✓
Correct answer
fixes the vertical LM schedule and income at that level.
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