If an Economist Supports Targeting Inflation as Opposed to Monetary

question 32

Multiple Choice

If an economist supports targeting inflation as opposed to monetary fine-tuning,this economist probably believes that time lags in the implementation of monetary policy are

• A)short but predictable.
• B)short but unpredictable.
• C)long and unpredictable.
• D)long but predictable.
• E)predictable in their short-run effects but unpredictable in the long run.

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Definitions:

Selective Attention

The ability to direct mental resources to relevant information in order to process that information further, while also ignoring irrelevant information.

Information Processing

A psychological theory that describes the process through which humans encode, store, and retrieve information.

Explicit Memory

The type of memory that involves conscious recollection of previous experiences and information.

Elaborative Rehearsal

A method of memory consolidation that involves associating new information with already known information.