... desired rate.” 189 190 CHAPTER 14 Answers to Additional Problems and Applications Use the following information to work Problems 16 to 18 The Bank of Korea’s monetary policy is to reduce the vulnerability... rate rises This belief would lead firms to increase their investment at the present time 187 188 CHAPTER 14 Use the following news clip to work Problems 12 to 14 IMF Warns Global Economic Slowdown... able to avoid high inflation and recessions It also has the advantage of inflation targeting insofar as it removes uncertainty about what will be the Fed’s policy 183 184 CHAPTER 14 Answers to