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Unformatted text preview: Assume that the goal is well-known and agreed upon. Assume that there is some policy tool that influences the goal so that at some time the goal is achieved. sufficient conditions for achieving goal: 1. perfect knowledge about the economy 2. no lag of any kind: recognition, action, and impact lags If policymakers were continuously aware of the value of the goal variable and if policy instruments had an instantaneous impact on the goal variable, then policy makers could adjust and readjust the policy instruments continuously. Neither sufficient condition exists. What method of operation maximizes the likelihood of hitting the goals?...
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This note was uploaded on 11/22/2011 for the course FIN FIN1100 taught by Professor Bradrifkin during the Fall '09 term at Broward College.
- Fall '09
- Personal Finance