1.In each case from the previous question, the Fed predicts how long the velocity shock itself will...
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1.In each case from the previous question, the Fed predicts how long the velocity shock itself will last: We call this "shock duration" in the table below. Mter that time, velocity growth will go back to its old level. Additionally, in each case, the Fed's staff of PhD economists estimates how many months it will take for a change in money supply to actually push AD in the desired direction: This is the
"monetary lag."
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