In good economic times, a surge in lending exaggerates the episode of economic growth. Which of the following adaptations of monetary policy can moderate these exaggerated effects?
A. price stability to reinforce effect of deposit insurance
B. monitoring asset prices and leverage
C. quantitative easing when banks are under stress
D. inflation-targeting lender of last resort policies
Answer:B
In good economic times, a surge in lending exaggerates the episode of economic growth. Which of the following adaptations of monetary policy can moderate these exaggerated effects?
A. price stability to reinforce effect of deposit insurance B. monitoring asset prices and leverage C. quantitative easing when banks are under stress D. inflation-targeting lender of last resort policies
Explanation: Type: Multiple Choice Category: Analyze