To Avoid Falling into a Liquidity Trap, Most Central Banks: A

Question 168
Multiple Choice

To avoid falling into a liquidity trap, most central banks: A) seek a positive but small inflation rate rather than zero inflation. B) target inflation rather than the money supply. C) conduct open-market operations to change the money supply instead of changing the discount rate. D) aim at a target of zero inflation so that inflation expectations are zero too.