Which of the Following Is Correct Regarding the Implications of Time

question 100

Multiple Choice

Which of the following is correct regarding the implications of time lags associated with monetary policy?

• A)The destabilizing effects of monetary policy will not be observed if it is used only for fine- tuning purposes.
• B)The Bank of Canada should design its policy based upon what has been already observed in the economy.
• C)Lags in monetary policy would be relatively longer in an economy with a fixed amount of investment expenditure.
• D)The Bank of Canada should only respond to shocks that are persistent and of a significant magnitude.
• E)Lags in monetary policy would be relatively longer in a closed economy than in an open one.

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A psychological disorder caused by exposure to or being a witness to a traumatic incident, marked by persistent flashbacks, distressing dreams, and intense anxiety.

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