Why Are Many Economists Skeptical of the Fed's Ability to Fine

question 95

Multiple Choice

Why are many economists skeptical of the Fed's ability to fine tune the economy?

• A) Monetary policy only affects output in the long run.
• B) Lags in policy make it difficult to properly time policy.
• C) Fiscal policy can be implemented more quickly than monetary policy.
• D) Monetary policy does not have any effect on output.

---

Definitions:

Magnetic Field

The space in which a magnetic force exists.

Electromagnetic Induction

Voltage produced by lines of magnetic flux cutting a conductor.

Weber

The SI unit of magnetic flux, symbolized as Wb, which quantifies the total magnetic field passing through a surface.

Left-hand Generator Rule

A rule to determine the direction of induced current in a generator based on the direction of force and magnetic field.