ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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M11
Which of these are advantages of monetary policy relative to fiscal policy?
Select all correct answers.
Persistence: Since monetary policy shifts the long-run aggregate supply it creates a new
potential GDP that will remain in place years after the monetary intervention has happened.
Scope: The Federal Reserve can make a broad-based impact by simply having new money
appear directly in households' bank accounts.
Speed: The implementation lag is much shorter for monetary policy.
Independence: Somewhat insulated from political considerations, monetary policymakers can
take a longer view of economic outcomes.
Calibration: With monetary policy it is easier to make an optimally sized intervention in the
economy or adapt to new events.
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Transcribed Image Text:Which of these are advantages of monetary policy relative to fiscal policy? Select all correct answers. Persistence: Since monetary policy shifts the long-run aggregate supply it creates a new potential GDP that will remain in place years after the monetary intervention has happened. Scope: The Federal Reserve can make a broad-based impact by simply having new money appear directly in households' bank accounts. Speed: The implementation lag is much shorter for monetary policy. Independence: Somewhat insulated from political considerations, monetary policymakers can take a longer view of economic outcomes. Calibration: With monetary policy it is easier to make an optimally sized intervention in the economy or adapt to new events.
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