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Which of the Following Is a Problem in Pursuing Monetary

Question 32

Multiple Choice

Which of the following is a problem in pursuing monetary policy?


A) The response of expenditure plans to changes in the real interest rate depends on many factors that make the response hard to predict.
B) The lag between a change in the quantity of money and its effect on economic activity may be long.
C) The real long- term interest rate that influences spending plans is linked only loosely to the cash rate.
D) All of the above answers are correct.

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