1. Monetary Policy and the Econom
... may alter their spending in anticipation of the policy change. Also, forward-looking financial markets may build such fiscal events into the level and structure of interest rates and thus further influence spending decisions before the government action. Other changes in demand or supply can be totally unpredictable and can influence the economy in unforeseen ways. Examples of such "shocks- on the ... demand side are changes in households' propensity to consume and shifts in consumer and business confidence. Monetary policy ... against giving interest rates a key role in guiding monetar...
- Word Count: 4049
- Approx Pages: 16
- Grade Level: Undergraduate