Shifts in Monetary Policy Will

question 75

Multiple Choice

Shifts in monetary policy will

• A) stimulate output and employment almost immediately, and this will make it easier for policy-makers to change monetary policy in a manner that will promote macroeconomic stability.
• B) stimulate output and employment almost immediately, and this will make it more difficult for policy-makers to change monetary policy in a manner that will promote macroeconomic stability.
• C) stimulate output and employment with time lags that are long and variable and this will make it easier for policy-makers to change monetary policy in a manner that will promote macroeconomic stability.
• D) stimulate output and employment with time lags that are long and variable and this will make it more difficult for policy-makers to change monetary policy in a manner that will promote macroeconomic stability.

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Definitions:

Quantity

The amount or number of a product or service that is available for use or sale.

Marginal Product

The additional output resulting from a one-unit increase in the use of a variable input while holding other inputs constant.

Marginal Cost

The fees associated with creating one additional unit of a good or service.

Average Variable Cost

The per-unit variable cost, determined by dividing the overall variable expenses by the amount of output generated.