In an economy with high unemployment, the central bank has room to decrease the interest rate. Policy makers might consider lowering interest rates if the current rate of unemployment is V the natural rate of unemployment All of the following are factors that could hinder the effectiveness of decreasing the interest rate in the face of an unemployment rate significantly higher than the natural rate of unemployment except O A. long term rates that closely follow short term rates. O B. interest rates near zero. OC. projected prolonged effect on the J-curve. O D. large diversity in econometric predictions.

In an economy with high unemployment, the central bank has room to decrease the interest rate. Policy makers might consider lowering interest rates if the current rate of unemployment is V the natural rate of unemployment All of the following are factors that could hinder the effectiveness of decreasing the interest rate in the face of an unemployment rate significantly higher than the natural rate of unemployment except O A. long term rates that closely follow short term rates. O B. interest rates near zero. OC. projected prolonged effect on the J-curve. O D. large diversity in econometric predictions.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question 17