What is the advantage of Fed transparency, the Fed's communication strategy since 2012, of clear communication about its actions and interpretations of data? Since inflation expectations are a key determinant of inflation, molding those expectations through communication of Fed intentions is potentially a powerful tool of monetary policy. O It reflects the culture of corporate transparency that has emerged in America in recent decades. O By creating expectations about future Fed policy, the Fed can catch people off-guard by upsetting those expectations, thereby achieving various policy objectives. O It exemplifies irrational economic behavior-a topic explored by behavioral economists.
What is the advantage of Fed transparency, the Fed's communication strategy since 2012, of clear communication about its actions and interpretations of data? Since inflation expectations are a key determinant of inflation, molding those expectations through communication of Fed intentions is potentially a powerful tool of monetary policy. O It reflects the culture of corporate transparency that has emerged in America in recent decades. O By creating expectations about future Fed policy, the Fed can catch people off-guard by upsetting those expectations, thereby achieving various policy objectives. O It exemplifies irrational economic behavior-a topic explored by behavioral economists.
Principles of Macroeconomics (MindTap Course List)
7th Edition
ISBN:9781285165912
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter22: The Short-Run Trade-off Between Inflation And Unemployment
Section: Chapter Questions
Problem 5PA
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