The Time Between When Federal Reserve Policymakers Decide to Close

question 57

Multiple Choice

The time between when Federal Reserve policymakers decide to close an output gap and when they act to change the fed funds rate is an example of:

• A) the outside lag in macroeconomic policy.
• B) a structural policy change.
• C) anchoring inflationary expectations.
• D) the inside lag in macroeconomic policy.

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Definitions:

Stock Split

An action a company takes to divide its existing stock into multiple shares to boost the liquidity of the shares.

Market Value

The price at which an asset would trade in a competitive auction setting, reflecting the current value assigned by the market.

Discount

The reduction applied to the nominal price of goods, services, or securities, often to accelerate sales or investment.

Common Stock

A type of security that represents ownership in a corporation, entitling the holder to vote at shareholder meetings and to receive dividends.