Why would central bankers have to pay attention to forecasts regarding consumer sentiment and expectations of business owners and managers?

What will be an ideal response?


Central bankers realize that they can impact the level of aggregate demand through changing the real interest rate. But they also realize that aggregate demand can change due to other causes like changes in consumer and/or business optimism and policymakers need to consider how aggregate demand may be change due to these other factors so that they do not over or under correct.

Economics

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The graph shows a

A) positive relationship that becomes steeper. B) negative relationship that becomes steeper. C) positive relationship that becomes less stee

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A monopoly is a market with

A) many suppliers each producing an identical product. B) no barriers to entry. C) many substitutes. D) one supplier. E) many suppliers each producing a slightly different product.

Economics

Every government's set of policies used to govern their economy:

A. are similar in most respects, but different in a few areas, making international trade sometimes difficult. B. are largely the same, making international trade a simple process. C. vary widely from one another, making international trade sometimes difficult. D. vary widely from one another, making international trade a simple process.

Economics

For infant industry tariff protection to be valid requires that

A) the tariff must be allowed to last forever. B) only industries that currently are producing efficiently should be protected. C) government officials must predict which industries will eventually be able to compete with more established foreign producers. D) the industries protected must have substantial monopoly power in the absence of foreign competition.

Economics