Increased government purchases-expansionary monetary policy

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Reference no: EM13986351

Which of the following is true?

-When increased government purchases or expansionary monetary policy does give the economy a boost, no one knows precisely how long it will take to do so.

-Given difficulties of timing and stabilization policy, an expansionary monetary policy intended to reduce the severity of a recession may instead add inflationary pressures to an economy that is already overheating.

-If Velocity changes, but moves in a fairly predictable pattern, the connection between money supply and GDP is still fairly predictable.

-Economic Advisors even using sophisticate econometric models, cannot forecast what economy will do in the future with a high degree of accuracy.

Reference no: EM13986351

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