Answered: Monetary policies can work only if…

Monetary policies can work only if private enterprises respond to them in certain way; if they respond in other ways, the policies fail. Explain and give examples.

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

Monetary policies can work only if private enterprises respond to them in certain way; if they respond in other ways, the policies fail. Explain and give examples.

Definition Definition Policy implemented by the central bank of a country (such as the Federal Reserve in the United States) to achieve certain macroeconomic objectives. Monetary policy is a supply-side macroeconomic policy that supervises the growth rate and money supply in the economy.

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