Monetary Policy Is Thought to Be

question 35

Multiple Choice

Monetary policy is thought to be:

• A)equally effective in moving the economy out of a recession as in controlling inflation
• B)more effective in moving the economy out of a recession than in controlling inflation
• C)more effective in controlling inflation than in moving the economy out of a recession
• D)only effective in moving the economy out of a recession
• E)only effective in controlling inflation

Explain the law of small numbers and its role in misjudging statistical probabilities.

Define affect heuristic and its application in quick decision-making processes.

Describe the concept and implications of house money in behavioral finance.

Understand the principle of regret aversion and its effects on decision-making.

---

Definitions:

Life Expectancy

The average number of years a person is expected to live, based on statistical averages.

Crude Death Rate

A measure of the number of deaths in a given population, scaled to the size of that population per unit of time, typically expressed as deaths per 1,000 individuals per year.

Birth Control

Methods or devices used to prevent pregnancy or manage fertility.

Birth Rates

The statistical measure of the number of births per thousand individuals in a population per year.