The consensus of major econometric models is that monetary policy has
A) no effect on real GDP.
B) an effect on real GDP only in the long run.
C) a negative effect on real GDP.
D) a substantial short-run effect on real GDP.

Question

Quizplus · Accepted Answer

The majority of econometric models suggest that monetary policy has a substantial short-run effect on real GDP. This means that changes in monetary policy can have an impact on economic activity within a relatively short period of time. However, the long-run effects may be more dependent on other factors such as fiscal policy, technology, and productivity growth.

The Consensus of Major Econometric Models Is That Monetary Policy