Monetary Policy Actions by the Fed Are

question 274

Multiple Choice

Monetary policy actions by the Fed are

• A)more effective in a restrictive direction than they are in an expansionary direction.
• B)more effective in an expansionary direction than they are in a restrictive direction.
• C)equally effective in both expansionary and restrictive directions.
• D)only effective when coupled with fiscal policy actions.

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Definitions:

Rational Approach

A method or process based on logic, reason, and systematic planning rather than on emotions or impulse.

Test Validation

The process of ensuring that a test is reliable and accurately measures what it is designed to assess.

Predictive Validity

Predictive validity refers to the extent to which a score on a scale or test predicts future performance on a related outcome.

Content Validity

The extent to which a test or measurement accurately represents the entire range of possible items or situations it is supposed to measure.