What is the consensus among economists and other monetary policy experts regarding the usefulness of the monetary policy instruments available to central banks in normal times?
What will be an ideal response?
The consensus seems to be that discount lending and reserve requirements are not very useful in terms of addressing short-term economic fluctuations. While discount lending can address short-term financial instability, it isn't very useful in addressing short-term fluctuations in prices and output. Consensus seems to be that short-term interest rates are the tool to use to address fluctuations in prices and output.
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As disposable income decreases, consumption
A. and saving both increase. B. decreases and saving increases. C. and saving both decrease. D. increases and saving decreases.
An employed individual is one who:
A) has been actively looking for jobs. B) was previously employed but has quit his job voluntarily. C) has a full-time or part-time paid job. D) is performing household chores for free.
The price of a new textbook increased from $60 to $75 in one year, while the price of a used textbook increased by 25 percent. What happened to the relative price of a used textbook?
A) It increased by 25 percent. B) It increased by 10 percent. C) It remained constant. D) It can't be determined without knowing the nominal price of the used textbook in at least one of the years.
A citizen in a developing country with a currency policy of convertibility on the current account could engage in all of the following transactions except:
A. sell foreign currency resulting from the exports of manufactured t-shirts. B. sell foreign currency resulting from the sale of a U.S. treasury bond. C. purchase foreign currency in order to import a BMW. D. purchase foreign currency in order to purchase a U.S. treasury bond.