It Might Take a While Before the Effects of Changes

question 41

Multiple Choice

It might take a while before the effects of changes in monetary policy are realized in the economy because it takes considerable time for

• A)the overnight interest rate and longer-term interest rates to adjust.
• B)investment expenditures and net exports to adjust.
• C)government purchases to adjust.
• D)monetary policy to be implemented via open-market operations.
• E)the exchange rate to adjust.

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Definitions:

Degrees of Freedom

The number of independent values or quantities which can be assigned to a statistical distribution or to a mechanism, minus the number of parameters that constrain these values.

Student t Distribution

A probability distribution that is used to estimate population parameters when the sample size is small and the population variance is unknown.

Parameter v

In statistics, it can refer to a parameter associated with a specific distribution or model, often used to denote degrees of freedom in certain distributions.

Variance V(t)

A statistical measure of the dispersion of a set of data points in a data series around the mean, denoted as V(t) when considering time-series data.