Recall the Application About the Effectiveness of Committees in Making

question 72

Multiple Choice

Recall the Application about the effectiveness of committees in making decisions about monetary policy to answer the following question(s) . Former Fed vice-chairman Alan Blinder developed an experiment to see whether individuals or groups make better decisions, and who makes them more rapidly. The experiment tested how quickly individuals and groups could distinguish changes in underlying trends from random events, such as if a one-month unemployment rate increase was a temporary aberration or the possible beginning of a recession, and their decisions as to changing monetary policy as a reaction to the events.
-Recall the Application. If the Federal Reserve was making a decision on changing interest rates

• A) the chairman, acting alone, would typically make a better decision than the Board of Governors.
• B) the Board of Governors would typically make a better decision than the chairman acting on his own.
• C) the Board of Governors would typically make an equally good decision as would the chairman acting on his own.
• D) neither the Board of Governors nor the chairman, acting alone, would tend to make accurate predictions.

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Definitions:

Honest Response

A truthful and sincere answer or feedback given without deception or evasion.

Service Economy

An economic system or sector focused on the production of services rather than goods.

Difficult Customer

A customer who presents challenges beyond the norm through their demands, behavior, or expectations, requiring careful handling.

Calmed Down

Entering a state of relaxation after being previously agitated or excited, reducing stress or anger.