Solved by verified expert :13)
The inside lags for monetary policy are relatively long compared to those for
fiscal policy.
14)
The outside lags related to monetary policy tend to be quite long.
15)
When the public expects inflation, real and nominal rates of interest will be
the same.
16)
The real interest rate is the nominal interest rate plus the expected inflation
rate.
17)
When people expect inflation, they assume that prices are going to increase at
a certain rate and factor this into their decision making.
18)
When the public expects inflation, real and nominal interest rates will differ
because inflation needs to be accounted for in calculating the real return from
lending and borrowing.
19)
Why might economic policies aimed at stabilization actually increase the magnitudes of economic
fluctuations?
20)
Explain why real and nominal rates of interest will differ when the public
expects inflation.
