Graphs that illustrate the time paths of endogenous variables when a shock hits the economy are called:
A) monetary policy paths.
B) dynamic shock figures.
C) impulse response functions.
D) endogenous growth models.

Question

Quizplus · Accepted Answer

Impulse response functions illustrate the time paths of endogenous variables in response to a shock. Monetary policy paths refer specifically to the actions of a central bank, while dynamic shock figures and endogenous growth models do not necessarily involve shocks or time paths of variables.

Graphs That Illustrate the Time Paths of Endogenous Variables When