Monetary policy has medium-run effects on which of the following?
A)the level of output but not its composition
B)both the level and composition of output
C)the nominal interest rate
D)the real interest rate
E) none of the above

Question

Quizplus · Accepted Answer

Monetary policy primarily affects the nominal interest rate in the medium run, as it influences inflation expectations and the money supply, which in turn impacts nominal rates.

Monetary Policy Has Medium-Run Effects on Which of the Following