The Self-Correcting Character of the ADI-IA Model Implies That the Central

question 79

Multiple Choice

The self-correcting character of the ADI-IA model implies that the central bank should

• A) never use active monetary policy (i.e. ,shift the policy reaction function)to eliminate output gaps.
• B) always use active monetary policy to eliminate output gaps.
• C) use active monetary policy to eliminate output gaps only when the self-correcting processes of the economy work very slowly.
• D) active monetary policy to eliminate output gaps only when the self-correcting processes of the economy work very rapidly.
• E) active monetary policy to eliminate expansionary gaps but not recessionary gaps.

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Definitions:

Delirium

A medical condition characterized by a sudden, severe confusion and rapid changes in brain function, affecting attention, cognition, and consciousness.

Neurocognitive Disorder

Represents a class of disorders marked by significant cognitive decline from a previous level of performance, affecting memory, attention, and decision-making.

Consciousness

The quality or state of being aware of an external object or something within oneself.

Psychiatric Symptoms

Manifestations of mental illness or distress, including changes in mood, behavior, and cognitive processes.