MONETARY POLICY OBJECTIVES AND TARGETS
427
TEST YOURSELF
1.
What are intermediate targets of monetary policy and why
are they employed by monetary authorities?
2.
What are the alternative intermediate targets of monetary
policy that have been suggested and used by central banks?
3.
Why are the choices of money stock and the interest rate
irrelevant as intermediate targets in a deterministic envi-
ronment, and which is superior in a stochastic environment
subject to demand shocks?
4.
When supply shocks prevail, is it better to target the inter-
est rate or the money supply and why?
5.
What is nominal GDP targeting and in what ...
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