Question #234

It is true that all official interest rates (which include the short-term policy target rate and all longer-maturity rates on government bonds) can be controlled by the central bank within the operational structure and tools at their disposable. However, the government doesn't pursue this option because they want higher interest rates to be set by the private capital markets so that they can dampen aggregate demand and avoid inflation.

Answer #1626

Answer: False

Explanation

Please see Who is in charge? for more information or post a comment.