Why are there significant time lags in monetary policy?
a. Financial markets are inefficient and information takes several months to impact them.
b. Changes in monetary policy only affect future projects such as factories, not current ones.
c. Interest rates takes several months to change after a change in money supply.
d. Interest rates are fixed and it takes several months to change laws to have the targets amended.
e. Because of the Fed's relative inability to convince Congress about the necessity of a particular monetary policy.
B
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An important reversal has created a new trend in economic inequality, which is that
a. wealth gaps between countries are now increasing. b. wealth gaps within states are now increasing. c. gaps in wealth are now smallest among the most populated nations. d. gaps in wealth are now no longer prominent or influential.
To avoid the imposition of capital controls, a government wishing to keep its exchange rate at a certain level, may rely on:
a. forbidding all sales or purchases of foreign currency. b. asking the large banks to keep the prices at a certain level. c. asking for loans from the International Monetary Fund (IMF). d. intervention in the foreign exchange market to raise or lower the exchange rate.