Why Will It Difficult for the Fed to Use Monetary

question 141

Multiple Choice

Why will it difficult for the Fed to use monetary policy to direct the economy back to full employment and price stability from the recession of 2008-2009?

• A) The Fed does not have the tools needed to alter the supply of money.
• B) Monetary policy is unable to alter short-term interest rates.
• C) The time lags between changes in monetary policy and when the changes exert an impact on output and prices are long and variable.
• D) It takes the Fed a long time to change the direction of monetary policy.

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Definitions:

Neural Network

A computational model designed to simulate the way human brains analyze and process information, consisting of interconnected nodes or neurons.

Linguistic Determinism

Linguistic determinism is the hypothesis that the structure of language affects its speakers' world view or cognition, and thus people's perceptions are relative to their spoken language.

Syntax

Syntax is the set of rules, principles, and processes that govern the structure of sentences in a given language, specifically the arrangement of words and phrases to create meaningful sentences.

Semantics

The branch of linguistics and logic concerned with meaning, including the ways meaning is structured in language and how changes in words and sentence structure affect meanings.