Adjusting Monetary Growth Based on Previous Changes in Nominal GDP

question 41

Multiple Choice

Adjusting monetary growth based on previous changes in nominal GDP

• A) is relatively easy for the Fed to undertake because the implementation lag is quitelong.
• B) could be destabilizing because of the uncertainty of the length of impact lags.
• C) is an effective policy because it allows the Fed to influence future macroeconomic performance.
• D) raises the price level proportionately.

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