To Make Forward Guidance Work

question 35

Multiple Choice

To make forward guidance work,

• A) the central bank must follow through on its promises.
• B) it is important that the central bank surprise the public.
• C) the central bank must not follow through on its promises.
• D) fiscal policy must support monetary policy.
• E) consumers cannot be forward-looking.

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Definitions:

Fifth Amendment

An amendment to the U.S. Constitution that provides several protections to individuals, including against self-incrimination and double jeopardy.

Self-Incrimination

The act of implicating oneself in a crime, which is protected against under the Fifth Amendment of the U.S. Constitution, allowing individuals to refuse to testify against themselves.

Professional Corporation

A business entity formed by licensed professionals, such as lawyers, doctors, or accountants, with the purpose of offering services within their profession.

Liability Purposes

Considerations or reasons relating to legal responsibility, often used in the context of determining who is liable for damages or losses.