CFA Practice Question

There are 136 practice questions for this study session.

CFA Practice Question

A country's neutral policy rate is 3%. If a central bank expects a positive output gap, it should set its policy rate to ______.

A. > 3%
B. = 3%
C. < 3%
Correct Answer: A

When the output gap is positive (negative), the policy rate should be above (below) the neutral rate.

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