Which of the following factors have not contributed to the "Great Moderation" of real GDP in the U.S. over the past 20 years?
A) Better inventory management
B) Better macroeconomic policy
C) Greater availability of financial products for lending and borrowing
D) Imposition of a ceiling on interest rates
E) Smaller real shocks

Question

Quizplus · Accepted Answer

Imposition of a ceiling on interest rates would likely constrain the ability of monetary policy to respond to shocks and stabilize the economy, which could potentially contribute to increased volatility rather than the "Great Moderation" of real GDP.

Which of the Following Factors Have Not Contributed to the "Great