Possible explanations that have been offered for the Great Moderation experienced in the United States include all of the following except:
A) good fortune.
B) economies that have become more flexible in absorbing shocks.
C) calm financial markets.
D) better understanding and use of monetary policy.

Question

Quizplus · Accepted Answer

The Great Moderation, a period of reduced volatility in economic output and inflation in the United States starting in the mid-1980s, is attributed to various factors including good luck (good fortune), structural changes making economies more resilient (more flexible in absorbing shocks), and improvements in monetary policy. However, calm financial markets are not typically cited as a cause of the Great Moderation. In fact, this period included episodes of financial market volatility, suggesting that the moderation was due to other factors.

Possible Explanations That Have Been Offered for the Great Moderation