The greater the credibility of monetary policy, the ____ likely inflationary expectations are to be anchored and the _____ the recessions caused by adverse inflation shocks.
A)more; shorter
B)more; longer
C)less; shorter
D)less; longer

Question

Quizplus · Accepted Answer

Greater credibility in monetary policy helps anchor inflationary expectations, making it easier to manage inflation shocks and potentially leading to shorter recessions.

The Greater the Credibility of Monetary Policy, the ____ Likely