Which of the Following Is NOT an Advantage of a Correctly

question 14

Multiple Choice

Which of the following is NOT an advantage of a correctly specified structural model?

• A)Structural models may help us to more accurately predict the effect that monetary policy has on economic activity.
• B)A structural model provides more pieces of evidence about monetary policy's effect on economic activity.
• C)Structural models may allow economists to more accurately predict the impact institutional changes have on the link between monetary policy and income.
• D)A structural model imposes no restrictions on the way monetary policy affects the economy.

---

Definitions:

Classical School

An economic theory that emphasizes free markets, the importance of supply and demand in determining prices, and the idea that economies are self-regulating systems.

Supply-Side

Economic policies aimed at increasing production and supply of goods and services, often through tax cuts or deregulation.

Milton Friedman

A prominent economist known for his theories on consumption analysis, monetary history and theory, and the complexity of stabilization policy.

Anna Jacobson Schwartz

An American economist known for her collaborative work with Milton Friedman on the history of monetary policy and banking.