Which of the Following Directly Influences the Distance Between the Origin

question 25

Multiple Choice

Which of the following directly influences the distance between the origin and the policy frontier?

• A) the effectiveness of fiscal policy
• B) the strength of the links between the intermediate targets of monetary policy and the corresponding final targets
• C) inefficiency in the labor market and the reflection of labor surplus in wage inflation
• D) the degree to which rational expectations cause policy options to become more or less effective in the long run
• E) none of the above

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Definitions:

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