The Primary Reason Why the Central Bank Cannot Systematically Surprise

question 13

Multiple Choice

The primary reason why the Central Bank cannot systematically surprise the public with its monetary policy is

• A)the nonneutrality of money.
• B)the presence of productivity shocks that generate real business cycles independently of the monetary side of the economy.
• C)the presence of rational expectations among the public.
• D)the presence of propagation mechanisms within the economy.

---

Definitions:

Conversational Tone

a writing or speaking style that is informal and friendly, mimicking everyday spoken language to foster a more personal connection with the audience.

Formal Tone

A style of communication characterized by a more serious and respectful manner, often used in professional or academic contexts.

Sender

The individual, group, or organization responsible for initiating a message in the communication process.

Receiver

The person or entity who receives a message from a sender, playing a crucial role in the communication process.