The "Greenspan doctrine"-central banks should not try to prick bubbles-was based on which of the following arguments?
A)Asset-price bubbles are nearly impossible to identify.
B)Monetary actions would be likely to affect asset prices in general,rather than the specific assets that are experiencing a bubble.
C)Raising interest rates has often been found to cause a bubble to burst more severely.
D)Monetary policy actions to prick bubbles can have harmful effects on the aggregate economy.
E)All of the above.

Question

Quizplus · Accepted Answer

All of the above arguments were used to support the "Greenspan doctrine" of not trying to prick asset-price bubbles. Therefore, the correct answer is E.

The "Greenspan Doctrine"-Central Banks Should Not Try to Prick Bubbles-Was