Multiple Choice
Advanced announcements of monetary policy changes are desirable since
A) financial markets need a long time to interpret and react to policy announcements
B) monetary policy only has an effect on real output if people believe policy announcements
C) as long as policy announcements are consistently followed, the central bank's credibility is increased, creating more rational expectations
D) individuals tend to adjust their behavior following these announcements in a way that actually negates the need for any real policy action
E) none of the above
Correct Answer:
Verified
Correct Answer:
Verified
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