标题: Schweser LOS Qbank Question [打印本页] 作者: ogoluwa 时间: 2013-4-22 05:37 标题: Schweser LOS Qbank Question
Which of the following statements regarding the monetary policy transmission mechanism is most accurate?
A)
Central banks can control long-term interest rates directly because decisions by consumers and businesses are based on these rates.
B)
Central banks can control short-term interest rates directly, but long-term interest rates are beyond their control.
C)
Central banks can control short-term interest rates by increasing the money supply to increase interest rates or by decreasing the money supply to decrease interest rates.
The correct answer was B)Central banks can control short-term interest rates directly, but long-term interest rates are beyond their control.
Does the new quantative easing part of Econ make B false as well? Or am I misunderstanding.
Thanks作者: btcapital 时间: 2013-4-22 05:38
The stated objective of this QE is to reduce long term interest rates. B states that long term interest rates are out of the Central Bank’s control.
I know the other are clearly false, but it seems B is now false as well. Unless I’m missing something.
