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If we know that expansionary monetary policy cannot create real economic growth

ID: 1187271 • Letter: I

Question

If we know that expansionary monetary policy cannot create real economic growth in the long-run, why would it ever be used in the short-run? Answer a. The case of cost-push (to combat wage pushes by workers). b. The case of demand-pull (pursuit of low unemployment targets). c. If the Fed felt obligated to pursue a rigid interest-rate target. d. All of the above If we know that expansionary monetary policy cannot create real economic growth in the long-run, why would it ever be used in the short-run? The case of cost-push (to combat wage pushes by workers). The case of demand-pull (pursuit of low unemployment targets). If the Fed felt obligated to pursue a rigid interest-rate target. All of the above a. The case of cost-push (to combat wage pushes by workers). b. The case of demand-pull (pursuit of low unemployment targets). c. If the Fed felt obligated to pursue a rigid interest-rate target. d. All of the above

Explanation / Answer

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