According to the Misperceptions Theory,if the Fed Wanted to Use

question 21

Multiple Choice

According to the misperceptions theory,if the Fed wanted to use monetary policy to influence the real economy it would have to

• A)increase the money supply whenever the economy was in a recession.
• B)decrease the money supply whenever the economy was in an inflationary boom.
• C)surprise the public with unexpected changes in monetary policy.
• D)abide by the monetary targets it announced.

---

Definitions:

Altruism

The selfless concern for the well-being of others, often leading to acts of kindness without expectation of reward.

Companionate Love

A type of love marked by profound attachment, companionship, and emotional closeness, commonly observed in enduring relationships.

Positive Support

Encouragement or assistance provided in a positive manner to promote the well-being and growth of others.

Self-Disclosure

The process of revealing personal, intimate information about oneself to others.