Why Can Monetary Policymakers Neutralize Demand Shocks but Not Supply

question 91

Essay

Why can monetary policymakers neutralize demand shocks but not supply shocks?

---

Definitions:

Time-Out

A disciplinary technique used to remove an individual from an environment where unacceptable behavior has occurred, to encourage reflection and calm down.

Improve

To make or become better; to enhance the quality, value, or performance of something.

Positive Reinforcer

A stimulus which, when presented after a behavior, increases the likelihood of that behavior occurring again in the future.

Negative Reinforcer

An unpleasant or adverse stimulus that, when removed after a behavior, increases the likelihood of that behavior being repeated.