Monetary Policy: End of Chapter Problem A "shock duration" is how long a velocity shock itself will last. This duration is predicted by the Fed. After that time, velocity growth will go back to its old level. Additionally, the Fed also estimates how many months it will take for a change in money supply to actually push AD in the desired direction. This is called the "monetary lag." The question is quite simple: In which of these cases should the Federal Reserve change money growth? Shift in money growth is stabilizing a. monetary lag: 14 months; shock duration: 8 months c. monetary lag: 20 months; shock duration: permanent e. monetary lag: 16 months; shock duration: 9 months g. monetary lag: 18 months; shock duration: permanent Answer Bank Shift in money growth is destabilizing b. monetary lag: 18 months; shock duration: 12 months d. monetary lag: 12 months; shock duration: 24 months f. monetary lag: 10 months; shock duration: permanent

Monetary Policy: End of Chapter Problem A "shock duration" is how long a velocity shock itself will last. This duration is predicted by the Fed. After that time, velocity growth will go back to its old level. Additionally, the Fed also estimates how many months it will take for a change in money supply to actually push AD in the desired direction. This is called the "monetary lag." The question is quite simple: In which of these cases should the Federal Reserve change money growth? Shift in money growth is stabilizing a. monetary lag: 14 months; shock duration: 8 months c. monetary lag: 20 months; shock duration: permanent e. monetary lag: 16 months; shock duration: 9 months g. monetary lag: 18 months; shock duration: permanent Answer Bank Shift in money growth is destabilizing b. monetary lag: 18 months; shock duration: 12 months d. monetary lag: 12 months; shock duration: 24 months f. monetary lag: 10 months; shock duration: permanent

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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