Even Though Monetary Policy Is Neutral in the Short Run

question 144

True/False

Even though monetary policy is neutral in the short run, it may have profound real effects in the long run.

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Definitions:

John B. Watson

An American psychologist who established the psychological school of behaviorism.

Behaviorists

Psychologists who focus on observable behaviors and the ways in which learning mechanisms affect behavior.

Unconditioned Response

An automatic, natural reaction to a stimulus that occurs without any need for prior learning.

Salivating

The secretion of saliva, often triggered by the anticipation of food, as part of the body's digestion process.