The leading macroeconometric models currently in use in Australia and the U.S.:
A) predict the same duration of the effects of a policy change.
B) predict the same response of output to a monetary expansion.
C) rely on the same set of assumptions.
D) demonstrate that there is substantial uncertainty about policy effects.
E) yield identical forecasts.

Question

Quizplus · Accepted Answer

The leading macroeconometric models currently in use in Australia and the U.S. do not rely on the same set of assumptions and hence do not yield identical forecasts. Also, there is usually substantial uncertainty about policy effects. Therefore, option D is the correct choice.

The Leading Macroeconometric Models Currently in Use in Australia and the U.S