Which of the following should be kept in mind when policymakers consider efforts to stabilize the economy?
A) The economy responds very quickly to changes in the interest rate and changes in economic conditions are easy to predict.
B) The economy responds very quickly to changes in the interest rate and changes in economic conditions are nearly impossible to predict.
C) The economy responds to changes in the interest rate with a lag and changes in economic conditions are easy to predict.
D) The economy responds to changes in the interest rate with a lag and changes in economic conditions are nearly impossible to predict.
Correct Answer:
Verified
Q27: The principal lag for monetary policy
A)and fiscal
Q28: The Fed lowered interest rates in 2001
Q29: The Federal Reserve will tend to tighten
Q30: President George W.Bush and congress cut taxes
Q31: Opponents of using policy to stabilize the
Q33: The Federal Reserve
A)requires little time to change
Q34: The principal reason that monetary policy has
Q35: If the Fed announced its intention to
Q36: For which of the following policies is
Q37: Part of the lag in monetary policy
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents