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Basic Question 7 of 10
A country's neutral policy rate is 3%. If a central bank expects a positive output gap, it should set its policy rate to ______.
B. = 3%
C. < 3%
A. > 3%
B. = 3%
C. < 3%
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Lina
Learning Outcome Statements
explain how the phase of the business cycle affects policy and short-term interest rates, the slope of the term structure of interest rates, and the relative performance of bonds of differing maturities;
describe the factors that affect yield spreads between non-inflation-adjusted and inflation-indexed bonds;
CFA® 2025 Level II Curriculum, Volume 6, Module 37.