The choice between hawk and dove positions depends on
A) the extent of cyclical unemployment at the time of the decision
B) relative importance of short-run and long-run monetary considerations
C) cooperation between Congress and the monetary authorities
D) the frequency of negative supply shocks
E) the Fed's relative concern for price and employment stability

Question

Quizplus · Accepted Answer

The hawk and dove positions are related to the Fed's concern for price and employment stability. Hawks prioritize price stability over employment stability and tend to tighten monetary policy in response to inflation, while doves prioritize employment stability over price stability and tend to loosen monetary policy in response to unemployment. Therefore, the choice between hawk and dove positions depends on the Fed's relative concern for price and employment stability.

The Choice Between Hawk and Dove Positions Depends on