Advanced Announcements of Monetary Policy Changes Are Desirable Since

question 50

Multiple Choice

Advanced announcements of monetary policy changes are desirable since

• A)financial markets need a long time to interpret and react to policy announcements
• B) monetary policy only has an effect on real output if people believe policy announcements
• C)as long as policy announcements are consistently followed, the central bank's credibility is increased, creating more rational expectations
• D)individuals tend to adjust their behavior following these announcements in a way that actually negates the need for any real policy action
• E)none of the above

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