Which Statement Best Characterizes the Effects of Monetary Policy

question 36

Multiple Choice

Which statement best characterizes the effects of monetary policy?

• A) Monetary policy is neutral in both the short run and the long run; therefore, it does not affect real variables.
• B) Monetary policy is neutral in the long run, but it may have effects on real variables in the short run.
• C) Monetary policy has profound effects on real variables in both the short run and the long run.
• D) Monetary policy has profound effects on real variables in the long run, but is neutral in the short run.

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Environment

The surrounding physical, natural, social, and cultural conditions in which an individual, organization, or community operates.

Forecasts

Predictions or estimates of future events or trends, typically based on analysis of data.

Trend Analysis

The practice of collecting information and attempting to spot a pattern, often used in financial markets, business intelligence, and research fields.

Strategic Plans

Long-term, forward-looking approaches with overarching goals and objectives that guide the direction of an organization.