Which of the following situations is likely to cause a central bank to undertake a loose monetary policy?
A) A rapidly rising inﬂation level.
B) Very low inﬂation level along with a rapid increase in unemployment.
C) Inﬂation below the target level along with good GDP growth.
D) Actual GDP substantially exceeding potential GDP.

Question

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The Answer of Which of the following situations is likely to cause a central bank to undertake a loose monetary policy?
A) A rapidly rising inﬂation level.
B) Very low inﬂation level along with a rapid increase in unemployment.
C) Inﬂation below the target level along with good GDP growth.
D) Actual GDP substantially exceeding potential GDP.

Which of the Following Situations Is Likely to Cause a Central