Economists Who Think That the Fed Is Likely to Make

question 54

Multiple Choice

Economists who think that the Fed is likely to make a lot of mistakes believe that the Fed is best advised to:

• A) adjust to every aggregate supply shock.
• B) adjust to every aggregate demand shock.
• C) follow a consistent policy.
• D) follow a discretionary policy.

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Definitions:

Postbox Rule

The Postbox Rule, also known as the mailbox rule, is a legal principle that determines the moment at which an offer is considered accepted, typically the moment the acceptance is sent.

Binding Contract

A legal agreement between two or more parties that is enforceable by law.

Entores Ltd.

A landmark case in contract law that established the principle that an acceptance of an offer becomes effective when communicated.

Telex

A communication network system used to send text messages through a network of teleprinters, historically significant before the advent of modern digital communications.