One Problem with the Ripple Effect from the Fed's Monetary

question 45

Multiple Choice

One problem with the ripple effect from the Fed's monetary policy is

• A) the fact that the monetary policy transmission process is long and drawn out.
• B) that changing the Federal funds target rate seldom has an effect on the markets for reserves and loanable funds.
• C) that the Fed's policy sometimes has a large impact on potential GDP as well as its usual impact on aggregate demand.
• D) the tight relationship between that the Federal funds rate has to aggregate spending.
• E) the frequent misalignment of the spread between the Federal funds rate and the Federal funds rate target.

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Definitions:

Respondent Behavior

A behavior that occurs as an automatic response to a certain stimulus, often used in classical conditioning scenarios.

Operant Behavior

Conduct that is regulated through its outcomes, such as incentives and penalties, within the learning environment.

Interactive Software

Software designed to respond to user inputs or other real-time actions.

Immediate Reinforcement

The provision of a reward or punishment immediately following a behavior, increasing the likelihood of that behavior being repeated in the future.