Which of the Following Explains Why the Monetary Policy Implementation

question 58

Multiple Choice

Which of the following explains why the monetary policy implementation lag is relatively short?
I. The FOMC meets several times a year and policymakers are easily able to confer in between meetings.
II. Open market operations, one of the Fed's policy instruments can be put into effect
Jimmediately.
III. The Chairman of the Fed works in close collaboration with the President.
IV. Most financial institutions are member banks and will not hesitate to put into effect any new monetary policy.

• A) I
• B) I and II
• C) I, II, and III
• D) I, II, III, and IV

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Definitions:

Human Capital

The capabilities, insights, and expertise held by a person or a group of people, considered in relation to their worth or expense to a company or nation.

Comparative Advantage

The ability of a country, individual, company, or region to produce a good or service at a lower opportunity cost than competitors.

Technical Goods

Products designed with a specific technical or functional purpose, often requiring specialized knowledge to use.

Heckscher-Ohlin Theorem

An economic theory stating that countries will export goods that require resources (factors of production) that are abundant and import goods that require resources in short supply.