One of the advantages of monetary policy is its speed and flexibility, but there are limitations. Explain.
What will be an ideal response?
Monetary policy is not subject to an administration lag because once the decision is made action can be taken quickly. The major timing problems are recognition lags that occur because it sometimes take time to recognize or understand that there is a problem that needs to be addressed by a change in monetary policy. Also, there is an operational lag that occurs between the time that the problem is recognized and the monetary policy takes effect. It may take 3 to 6 months for interest rate changes to have the anticipated effect on the economy.
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A firm is charging a different price for each unit purchased by a consumer. This is called
A) first-degree price discrimination. B) second-degree price discrimination. C) third-degree price discrimination. D) fourth-degree price discrimination. E) fifth-degree price discrimination.
Immediately following the Revolution, in the 1780s,:
a. indigo was the most important U.S. export (in terms of dollar value). b. Spain placed severe restrictions on trade between its colonies and the U.S. c. the U.S. became the main provider of shipping services for the French and West Indies. d. Great Britain eliminated tariffs on rice and tobacco.
A cost or benefit of a good imposed on people other than the consumers or producer of a good is called a(n):
a. public good. b. merit good. c. private good. d. externality.
Critics argue that a disadvantage of the Earned Income Tax Credit is that it does not effectively target the working poor because many recipients are the teenage children of middle-income families
a. True b. False Indicate whether the statement is true or false