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Although Economists Have Argued Many Years About the Identity of Appropriate

Question 14

Multiple Choice

Although economists have argued many years about the identity of appropriate operating and intermediate target variables, there is no dispute about the chief characteristics of a suitable operating or intermediate target. Which of the below is NOT a chief characteristic?


A) linkage (an expected connection with the intermediate target)
B) objectivity (decision-making eliminates personal experiences)
C) observability (targets must be readily and regularly observable economic variables)
D) responsiveness (respond quickly and in an expected way to the Fed's use of its tools)

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