Card 62 / 145: Which of the following is a reason it might be hard for the Fed to restore aggregate demand in the face of a nominal shock?
A)
Banks usually don't do what the Fed demands of them.
B)
The Fed must operate in real time, when a lot of the data about the state of the economy are unknown.
C)
The economy responds to the Fed's actions with no lag.
D)
The Fed might run out of money.
Answer:
B) The Fed must operate in real time, when a lot of the data about the state of the economy are unknown.
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