Time Lags in Monetary Policy Can Cause

question 32

Multiple Choice

Time lags in monetary policy can cause

• A)short- term monetary policy to work more effectively than long- term targeting.
• B)difficulty in the timing of appropriate policy and can even lead to destabilization.
• C)an expansionary policy to have too little an effect because it takes much longer to work than was expected by policymakers.
• D)monetary policy to work more slowly and more smoothly than was initially predicted by economists.
• E)monetary expansions to work very quickly but cause monetary contractions to work very slowly.

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Definitions:

Human Personality

refers to the individual differences in characteristic patterns of thinking, feeling, and behaving.

Big Five Model

A theory in psychology proposing five broad dimensions of personality traits: Openness, Conscientiousness, Extraversion, Agreeableness, and Neuroticism.

Extraversion

A personality trait characterized by energy, positive emotions, surgency, and the tendency to seek stimulation and the company of others.

Openness to Experience

A dimension of the Big Five personality traits characterized by a person's willingness to try new things and be open to new experiences.