Which of the following statement(s) about Monetary Policy is/are true? The FMOC
ID: 1201135 • Letter: W
Question
Which of the following statement(s) about Monetary Policy is/are true?
The FMOC has access to more information and better models than the rest of the economic agents in the economy.
Monetary Policy is a major stabilization tool that has short inside and outside lags.
Financial markets pay great attention to changes in the federal funds rate because these changes indicate the Fed's plan for monetary policy.
Decisions about Monetary Policy are made by The Federal Open Market Committee
Monetary policy can compensate for poorly executed fiscal policy.
One problem with using monetary policy to address "bubbles" in asset markets is that doing so presupposes that the Federal Reserve is better than financial-market professionals at identifying bubbles.
Monetary policy is well-suited for addressing the problem of inappropriately high asset prices in particular sectors of the economy because increasing interest rates decreases the demand for assets, bringing down their price.
Monetary policy can be used for longer periods provided it keeps open market operations at a high level.
a.The FMOC has access to more information and better models than the rest of the economic agents in the economy.
b.Monetary Policy is a major stabilization tool that has short inside and outside lags.
c.Financial markets pay great attention to changes in the federal funds rate because these changes indicate the Fed's plan for monetary policy.
d.Decisions about Monetary Policy are made by The Federal Open Market Committee
e.Monetary policy can compensate for poorly executed fiscal policy.
f.One problem with using monetary policy to address "bubbles" in asset markets is that doing so presupposes that the Federal Reserve is better than financial-market professionals at identifying bubbles.
g.Monetary policy is well-suited for addressing the problem of inappropriately high asset prices in particular sectors of the economy because increasing interest rates decreases the demand for assets, bringing down their price.
h.Monetary policy can be used for longer periods provided it keeps open market operations at a high level.
Explanation / Answer
a
b True
c True
d True
e False
f False
g True
h False
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