Under which policy regime is GDP most insulated from the effects of random shifts in the IS schedule?
A) A monetary policy targeted at a constant interest rate with checking accounts paying no interest
B) A monetary policy targeted at a constant money supply with checking accounts paying no interest
C) A monetary policy targeted at a constant money supply with checking accounts paying competitive interest rates
D) A monetary policy targeted at a constant monetary base with checking accounts paying competitive interest rates
E) Either a or c depending on economic circumstance
Correct Answer:
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