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Monetary policy decisions can have long-term effects on an economy's overall output.Question 38Answera.Trueb.False

Question

Monetary policy decisions can have long-term effects on an economy's overall output.Question 38Answera.Trueb.False

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Solution

a.True

Monetary policy decisions indeed have long-term effects on an economy's overall output. These decisions, made by a country's central bank or monetary authority, involve management of money supply and interest rates. They aim to achieve maximum employment, stable prices and moderate long-term interest rates. Changes in monetary policy can influence interest rates, inflation, and business cycles, all of which have a significant impact on an economy's overall output in the long run.

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