Question

Which of the following is true? The Fed can accurately measure real GDP. The Fed can...

Which of the following is true?

The Fed can accurately measure real GDP.
The Fed can accurately measure potential GDP.
Monetary policy is subject to fewer uncertainties than fiscal policy.
The Fed can reliably predict the interest responsiveness of consumption and investment.
The AD-IA model illustrates the various issues the Fed needs to consider when it conducts monetary policy.
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Answer #1

Option e. Is true

The AD- IA model illustrates the various issues the fed needs to consider when it conducts monetary policy.

The aggregate demand inflation model,is easy to Explain the Economic fluctuations which shows how shifts in

Demand and shocks to prices can affect

Real GDP . This model depends upon

The assumption of monetary policy rule.

It illustrates the various issues

That the federal Reserve considers

In order to increase interest rates

In response to increase in inflation and vice versa.

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