Ch18 Test Bank Docx Monetary Policy Stabilizing The Domestic

Student name:__________

1) As stated by the textbook authors, “Central bankers have a long list of goals and a short list of tools they can use to achieve them.” What are the goals and what are the tools available to central bankers? What primary tool do most central bankers use today? Why?

2) In 2001, the FOMC lowered the target federal funds rate 11 times, cutting the rate from 6½ percent to 1¾ percent. Why didn't the Fed just cut the rate by larger amounts early on?

3) State and briefly define the leading conventional tools of monetary policy available to the Federal Reserve.

4) Why is it necessary to distinguish between the target federal funds rate range and the market federal funds rate?

5) Could the Fed impact the amount of borrowing in the federal funds market without changing their target for the federal funds rate? Explain.

6) What is the difference between the zero lower bound (ZLB) and the effective lower bound (ELB) for nominal interest rates?

7) Compare the supply curve in the market for bank reserves prior to 2008 with the supply curve following the financial crisis. Include a graph or two as part of your answer.

8) Is discount lending used to keep banks from failing? Explain your answer.

9) Discuss why the discount rate may be considered a penalty rate of interest charged to banks.

10) Since 2002, the Fed has set the primary discount rate above the IOER rate. Why is this likely to prevent spikes in the market federal funds similar to the ones that occurred in previous years?

11) What is the difference between primary and secondary credit offered by the Fed, and who would use secondary credit?

12) What is the consensus among economists and other monetary policy experts regarding the usefulness of the monetary policy instruments available to central banks in normal times?

13) Explain the three desirable features of a good monetary policy instrument.

14) Why is publicly announcing a numerical inflation target an important part of an inflation targeting strategy for a central bank?

15) In terms of desirable features of a monetary policy instrument, explain why the size of the staff at the Fed is not a good policy instrument. Be sure to address which feature(s) it fits and which one(s) it doesn't.

16) The Fed could use reserve requirements as a monetary policy instrument. In terms of desirable features for policy instruments, assess the viability of using reserve requirements.

17) Discuss why the Fed can independently set both a quantity (aggregate reserves) and a price (interest rate) target unlike other monopolies.

18) We saw in Chapter 18 that many central banks have turned to a policy framework of inflation targeting. Discuss whether this would be effective in a country experiencing deflation.

19) Discuss the key criteria for success and the advantages of a central bank adopting the framework of inflation targeting.

20) Is the Taylor rule the specific formula followed by the FOMC to set federal funds rate targets? Explain.

21) Consider the following Taylor rule.
target federal funds rate = natural rate of interest + current inflation + 2x(inflation gap) + x(output gap) What do the relative sizes of the coefficients on the inflation and output gaps (2x, x) reveal?

22) Consider the following Taylor rule.
target federal funds rate = natural rate of interest + current inflation + ½(inflation gap) + ½(output gap) Since the coefficients on the inflation and output gaps are equal, does this mean the central bank will respond to a one percent increase in inflation with the same change in the target rate as they would initiate from a one percent increase in the output gap? Explain

23) Consider the following Taylor rule.
target federal funds rate = natural rate of interest + current inflation + ½(inflation gap) + ½(output gap) Explain what happens to the real interest rate and why it happens, each time inflation increases by 1 percent.

24) The targeted federal funds rate set by policymakers deviated from the Taylor rule in 1992–93, 2002–05, and 2008–13. Specifically, the FOMC set the target below the Taylor rule measure. What do these periods have in common that might help explain this?

25) What is your response to the following statement?
"The Taylor rule shows a strong correlation between the target rate actually set by the FOMC and the one predicted by the rule. Since the Taylor rule would provide accountability, credibility, and transparency, the FOMC committee should be dissolved and replaced by a form of the Taylor rule."

26) Under what conditions might it be appropriate for a central bank to employ unconventional monetary policy tools?

27) What were the three unconventional policy approaches used by the Fed during the financial crisis of 2007–2009?

28) How does a policy of forward guidance influence the economy and inflation?

29) How do targeted asset purchases alter the outlook for the economy and inflation?

30) What are the advantages from the 2002 change in the Fed's lending policy?

31) Imagine the inflation rate begins to rise rapidly. The FOMC meets, and it is believed that the target interest rate needed to stem the inflation could easily exceed 20 percent. Many members of the committee believe the Fed cannot announce this high of a target for political reasons. Discuss what the FOMC could do in terms of targets and what change occurred in 2002 that is going to make their job a bit more difficult.

32) Discuss what experience concerning required reserves occurred during the Great Depression that contributes to the decision today not to use required reserves as an active tool of monetary policy.

33) The primary monetary policy tool most used by central banks today is

A) the quantity of M1.
B) interest rates.
C) the quantity of M2.
D) the size of the money multiplier.

34) One way the Fed can inject reserves into the banking system is to increase

A) the size of the Fed's balance sheet through purchasing securities.
B) the discount rate.
C) loans to nonbank corporations.
D) the size of the Fed's balance sheet through selling securities.

35) The Fed can control

A) the amount of reserves, but cannot control the monetary base.
B) the composition of the monetary base, but cannot affect the market interest rate.
C) the size of the monetary base but not the price of its components.
D) either the size of the monetary base or the price of its components.

36) The effective lower bound for nominal interest rates is

A) zero.
B) an unknown level below zero.
C) a rate consistent with two percent inflation.
D) a rate consistent with the full employment output level of economic activity.

37) As of 2020, the largest expansion of the Fed’s balance peaked in what year?

A) 1933
B) 2008
C) 2015
D) 2019

38) The conventional policy tools available to the Fed include each of the following, except which one?

A) currency-to-deposit ratio
B) discount rate
C) target federal funds rate range
D) reserve requirement

39) Which of the following is a conventional tool of monetary policy?

A) target federal funds rate range
B) deposit rate
C) currency-to-deposit ratio
D) deposit rate and target federal funds rate range

40) The FOMC

A) sets the federal funds rate.
B) uses the discount rate is its primary policy tool.
C) sets the target federal funds rate range.
D) sets the dealer's spread as the difference between the target and actual federal funds rate.

41) The market for reserves derives from the fact that

A) reserves pay a relatively high return.
B) desired reserves do not always equal actual reserves.
C) the Fed refuses to lend to banks.
D) banks do not want excess reserves.

42) The fact that there is a market for federal funds enables banks to

A) make fewer loans than they would otherwise.
B) borrow more from the Fed.
C) hold a lower level of excess reserves than they would otherwise hold.
D) hold less in required reserves.

43) Which one of the following would be categorized as an unconventional monetary policy tool?

A) the interest rate on excess reserves (IOER)
B) targeted asset purchases
C) federal funds rate target range
D) deposit rate

44) Federal funds loans are

A) secured loans between banks and the Fed.
B) unsecured loans.
C) collateralized loans between banks.
D) guaranteed by the FDIC.

45) Until 2008, the Fed could make the market federal funds rate equal the target rate by

A) mandating that all loans be transacted at the target rate.
B) setting the discount rate below the federal funds rate.
C) entering the federal funds market as a borrower or a lender.
D) paying higher interest on reserves.

46) Reserve demand becomes horizontal at the IOER rate because

A) banks will not make loans at less than the IOER rate.
B) banks must earn more than the IOER rate to lend.
C) the reserve supply is always set by the Fed so that the federal funds rate is greater than the IOER rate.
D) the IOER rate is the upper bound of the target federal funds rate.

47) Since the Great Recession in the United States, reserves have been so abundant that the

A) federal funds rate is not easily manipulated with open market operations.
B) Fed cannot affect the federal funds rate.
C) Fed prefers to target the discount rate.
D) IOER (interest rate on excess reserves) is ineffective.

48) The principal tool the Fed uses to keep the federal funds rate close to the target is

A) the required reserve rate.
B) discount lending.
C) open market operations.
D) the IOER (interest rate on excess reserves).

49) If the market federal funds rate were below the target rate, the response from the Fed would likely be to

A) raise the IOER (interest rate on excess reserves).
B) purchase U.S. Treasury securities.
C) sell U.S. Treasury securities.
D) raise the discount rate.

50) If the market federal funds rate were above the target rate, the response from the Fed would likely be to

A) purchase U.S. Treasury securities.
B) sell U.S. Treasury securities.
C) lower the IOER (interest rate on excess reserves).
D) lower the discount rate.

51) If the demand for reserves remains constant and the market federal funds rate is below the target rate, the Fed would

A) increase the IOER (interest on excess reserves).
B) decrease the IOER (interest on excess reserves).
C) do nothing and let the market work.
D) increase the supply of reserves.

52) If the current market federal funds rate is in the target rate range and the demand for reserves decreases, the likely response in the federal funds market will be that the market federal funds rate will

A) decrease.
B) equal the target rate.
C) will increase.
D) not change because the reserve supply is so high that the market federal funds rate will be unchanged.

53) If the current market federal funds rate equals the target rate and the demand for reserves increases, the likely response in the federal funds market will be

A) a decrease in the market federal funds rate.
B) a market federal funds rate that will equal the target rate.
C) an increase in the market federal funds rate.
D) no change; reserve supply is so high that the market federal funds rate will be unchanged.

54) Consider the following graph. If the Fed increases the IOER from IOER Rate₀ to IOER Rate₁, they are implementing what type of policy?

A) expansionary monetary policy to increase lending throughout the economy
B) tighter monetary controls where there is an increase in the rate at which banks are willing to lend
C) loosening of controls such that banks are less aggressively bidding for funds to deposit with the Fed
D) no change in monetary policy since reserve supply is so high that the market federal funds rate will be unchanged

55) The Fed can do which of the following in the economy?

A) change interest rates but not the supply of money
B) change the supply of money but not the interest rates
C) change both interest rates and the supply of money
D) change neither interest rates nor the supply of money

56) The daily reserve supply curve is

A) upward-sloping.
B) downward-sloping.
C) vertical.
D) horizontal.

57) If the Fed sees no need to engage in expansionary monetary policy, then

A) the Fed will likely shrink its balance sheet rapidly.
B) eventually, the Fed will shrink its balance sheet by letting securities it holds expire.
C) it will be impossible for the Fed to shrink its balance sheet.
D) the Fed is likely to increase the size of its balance sheet.

58) Discount lending by the Fed

A) is the key component of monetary policy.
B) is more important today than in years past.
C) is usually small except in times of crisis.
D) amounts to five billion dollars in volume during an average week.

59) Discount lending is part of the Fed's function of

A) lender of last resort.
B) open market operations.
C) the government's bank.
D) regulation of banking.

60) When the Fed wants to tighten monetary policy, the staff of the Fed is likely to

A) increase discount loans.
B) increase IOER (interest rate on excess reserves).
C) purchase U.S. Treasury Securities.
D) sell U.S. Treasury Securities.

61) Since 2012, what does the ECB frequently use to inject reserves into the banking systems of countries that use the euro?

A) discount loans
B) repurchase agreements
C) an outright purchase of securities
D) an outright sale of securities

62) The interest rate on excess reserves is

A) the upper bound of the federal funds target rate range.
B) the lower bound of the federal funds target rate range.
C) unrelated to the federal funds target rate range.
D) equal to the target federal funds rate.

63) How did the Federal Reserve change its discount lending practices in 2002?

A) For most of its history the Federal Reserve has loaned reserves to banks at a rate equal to the target federal funds rate; after 2002, the rate would be below the target federal funds rate.
B) The changes made in 2002 have made it more difficult for the Fed to meet its interest-rate stability objective.
C) Before 2002, the Fed discouraged banks from borrowing at the discount window and actually created volatility in the market for reserves.
D) Since 2002, the Fed controls the quantity of credit extended as well as its price.

64) The Fed will make a discount loan to a bank during a crisis

A) no matter what condition the bank is in.
B) only if the bank is sound financially and can provide collateral for the loan.
C) but if the bank doesn't have collateral the interest rate is higher.
D) only if the bank would fail without the loan.

65) For most of the Fed's history, the Fed

A) loaned reserves at an interest rate below the target federal funds rate.
B) provided far more loans to banks than they did to each other.
C) was very lenient in making discount loans.
D) tied the discount rate to the rate on Treasury securities.

66) The fact that, for most of its history, the Fed was reluctant to make discount loans

A) at times was a destabilizing force for financial markets.
B) proved to be a very stabilizing force for financial markets.
C) pushed the discount rate above the target federal funds rate.
D) resulted in only banks in very strong financial shape borrowing from the Fed.

67) The types of loans the Fed makes consist of each of the following, except which one?

A) primary credit
B) conditional credit
C) seasonal credit
D) secondary credit

68) Primary credit extended by the Fed is

A) for banks needing long-term loans to work out financial problems.
B) the highest interest rate loans offered by the Fed.
C) short-term, usually overnight loans.
D) loans offered at the prime interest rate for periods exceeding 30 days but less than one year.

69) The interest rate on primary credit extended by the Fed is

A) below the IOER.
B) above the IOER.
C) equal to the IOER.
D) consistently uncorrelated with the IOER.

70) Secondary credit provided by the Fed is designed for banks that

A) qualify for a lower interest than what is available under primary credit.
B) are in trouble and cannot obtain a loan from anyone else.
C) want to borrow without putting up collateral.
D) are foreign.

71) The interest rate the Fed charges for secondary credit is

A) above the primary discount rate.
B) below the market federal funds rate.
C) below the primary discount rate.
D) equal to the market federal funds rate.

72) Seasonal credit provided by the Fed is not as common as it used to be because

A) there are fewer banks in these areas.
B) other sources for long-term loans have developed for banks in these areas.
C) it has been replaced by secondary credit.
D) much of the credit was not repaid.

73) The Fed is reluctant to change the required reserve rate because

A) changes in the rate have a small impact on the actual quantity of money.
B) the money multiplier is not impacted by the required reserve rate.
C) the time lag between changing the required reserve rate and changes in the money supply can be too long.
D) small changes in the required reserve rate can have too big of an impact on the money multiplier and the level of deposits.

74) In 1936, when the Fed doubled the reserve requirements, bank executives

A) allowed their excess reserves to decline.
B) increased excess reserves to the new proposed level in advance of the change in requirements.
C) maintained the level of excess reserves desired by the Fed.
D) increased lending from remaining reserves, causing inflation.

75) Today, reserve requirements are

A) set in a way that makes reserve demand highly unpredictable.
B) changed whenever the target federal funds rate is changed.
C) changed instead of making changes in the discount rate.
D) not often used as a direct tool of monetary policy.

76) For the European Central Bank (ECB), the equivalent of the FOMC's target federal funds rate is the

A) target discount rate.
B) European target federal funds rate.
C) target refinancing rate.
D) London Inter-Bank Offer Rate.

77) The European Central Bank’s equivalent of the Fed's open market operations (OMO) is

A) very similar to the Fed's OMO in that they are highly centralized.
B) dissimilar to the Fed's OMO in that the operations are conducted at all 19 of the National Central Banks simultaneously.
C) similar to the Fed's OMO in that they accept only U.S. Treasury securities in their refinancing operations.
D) dissimilar to the Fed's OMO because fewer banks participate in the auctions of the securities.

78) The European Central Bank's Marginal Lending Facility is used to provide

A) short-term loans to banks at rates below the target refinancing rate.
B) long-term loans to banks at rates above the target refinancing rate.
C) short-term loans at rates above the target refinancing rate.
D) long-term loans to banks at rates below the target refinancing rate.

79) The ECB's

A) marginal lending facility was the model for the Fed's redesign of its procedures for lending to banks.
B) success in controlling reserves by paying interest on them has led the Fed to do the same.
C) weekly auctions include only a few of the largest banks in Europe.
D) marginal lending facility was modeled after the Fed's redesign of its procedures for lending to banks.

80) Within the European Central Bank, banks with excess reserves

A) can deposit them with the ECB and earn an interest rate below the target refinancing rate.
B) earn no interest on excess reserves, similar to the system in the United States.
C) must deposit the excess with the ECB's Deposit Facility.
D) lend them to other banks through overnight loans.

81) As of 2019, even though the ECB charges a fee for accepting excess reserves, banks have not switched from holding reserves to holding cash in their vaults. Were they to make that switch, the policy impact of the negative deposit rate would become

A) negligible.
B) expansionary.
C) contractionary.
D) indeterminate.

82) Prior to the euro-area crisis, the ECB’s deposit facility contained nearly all of the excess reserves in the Eurosystem’s banks. What has changed this in recent years?

A) The deposit facility interest rate fell.
B) Commercial banks increased their lending to other commercial banks.
C) ECB policy changed, which made it more difficult to keep reserves in the deposit facility.
D) As the ECB began selling large quantities of sovereign bonds, banks’ excess reserve levels fell dramatically.

83) One key difference between reserve requirements for the Fed and the European Central Bank (ECB) is that the ECB's reserve requirements are

A) at a much higher rate than the Fed's.
B) more difficult for banks to predict.
C) determined annually.
D) based on all of a bank’s liabilities.

84) The European equivalent of the U.S. market federal funds rate is called the

A) overnight cash rate.
B) target refinancing rate.
C) European discount rate.
D) overnight repurchase rate.

85) The FOMC

A) and the ECB are equally successful at keeping the target rate in range.
B) has always been more successful than the ECB at keeping the market rate closer to the target.
C) was more successful than the ECB at keeping the market rate closer to the target rate until the Fed began paying interest on reserves.
D) was less successful than the ECB at keeping the market rate closer to the target rate until the Fed began paying interest on reserves.

86) Over the years, most monetary policy experts would agree with each of the following statements, except which one?

A) The reserve requirement is not useful as an operational instrument.
B) Central bank lending is necessary to ensure financial stability.
C) Short-term interest rates are the best tool to use to stabilize short-term fluctuations in prices and output.
D) Transparency in policy making hinders accountability.

87) A good monetary policy instrument is

A) observable only to monetary policy officials.
B) tightly linked to monetary policy objectives.
C) controllable and rigid.
D) difficult to change.

88) The reserve requirement does not meet all of the criteria of a good monetary policy tool, because it

A) is not controllable.
B) is not observable.
C) cannot be quickly changed.
D) has a predictable impact on the economy.

89) From 1979 to 1982, the Fed targeted bank reserves as the monetary policy tool. One side effect of this strategy was that

A) the inflation rate increased to over 18 percent in 1983.
B) many banks failed that otherwise may not have.
C) interest rates rose very high.
D) inflation remained high for most of the 1980s.

90) In the period of 1979 to 1982, if the Fed had set an interest rate target that was equal to the actual market interest rates that occurred, the

A) economy would have been better off.
B) target would not have been politically acceptable.
C) target would have been a federal funds rate of 0 percent.
D) inflation rate would have risen further.

91) If reserve demand is volatile, in order for the central bank to keep interest rates from being volatile, it must

A) target the quantity of reserves.
B) set targets for both interest rates and the quantity of reserves.
C) not target the interest rates.
D) let the quantity of reserves fluctuate.

92) During the 1990s many countries developed a monetary policy framework that focused on inflation targeting. This is an example of policymakers focusing

A) directly on an objective.
B) on multiple numerical targets.
C) exclusively on an intermediate target that will effectively result in the final objective.
D) on development of a new intermediate target that will effectively result in the final objective.

93) Often, central banks that employ inflation targeting have a hierarchical mandate that means that

A) hitting the inflation target is the first priority after all other stated objectives are reached.
B) hitting the inflation target is the only objective.
C) the inflation target is the second most important goal after economic growth, which is always the most important goal for monetary policymakers.
D) hitting the inflation target comes first, and everything else comes second.

94) Inflation targeting does all of the following, except which one?

A) increase policymakers' credibility
B) increase policymakers' accountability
C) communicate policymakers' objectives clearly and openly
D) hinder economic growth

95) The Taylor rule is

A) the formula for setting monetary policy that is followed explicitly by the FOMC.
B) an approximation that seeks to explain how the FOMC sets their target.
C) an explicit tool used by the ECB but not the Fed.
D) a rule adopted by Congress to make the Fed's monetary policy more accountable to the public.

96) The components of the formula for the Taylor rule include each of the following, except which one?

A) target federal funds rate
B) current inflation rate
C) 30-year U.S. Treasury bond rate
D) inflation gap

97) The Taylor rule allows the real long-term interest rate to

A) fluctuate with the natural rate of interest.
B) be zero.
C) be 5 percent less the inflation rate.
D) be 1 percent.

98) Use the following formula for the Taylor rule to determine the target federal funds rate.

target federal funds rate = natural rate of interest + current inflation + ½(inflation gap) +½(output gap)

where the current rate of inflation is 5 percent, the natural rate of interest is 2 percent, the target rate of inflation is 2 percent, and output is 3 percent above its potential, the target federal funds rate is

A) 6.5 percent.
B) 2.5 percent.
C) 3.5 percent.
D) 10 percent.

99) Use the following formula for the Taylor rule to determine the target federal funds rate.

target federal funds rate = natural rate of interest + current inflation + ½(inflation gap) +½(output gap)

where the current rate of inflation is 4 percent, natural rate of interest is 2 percent, target rate of inflation is 2 percent, and output is 3 percent above its potential, the target federal funds rate is

A) 7 percent.
B) 8.5 percent.
C) 5 percent.
D) 4.5 percent.

100) Use the following formula for the Taylor rule

target federal funds rate = natural rate of interest + current inflation + ½(inflation gap) +½(output gap)

to determine what would happen if output in the economy were to fall by an additional one percent below potential. Then, the target federal funds rate would

A) increase by 1.5 percent.
B) decrease by 1.5 percent.
C) remain at 2.5 percent.
D) decrease by 0.5 percent.

101) Use the following formula for the Taylor rule

target federal funds rate = natural rate of interest + current inflation + ½(inflation gap) +½(output gap)

to determine what would happen if the inflation rate in the economy were to fall by 2 percent below the target inflation rate. Then, the target federal funds rate would

A) decrease by 3.0 percent.
B) remain at 2.5 percent.
C) decrease by 1.0 percent.
D) increase by 1.0 percent.

102) Use the following formula for the Taylor rule

target federal funds rate = natural rate of interest + current inflation + ½(inflation gap) +½(output gap)

to determine the change in the target federal funds rate for every one percent decrease in the rate of inflation. This will

A) raise the target federal funds rate by 1.5 percent.
B) lower the target federal funds rate by 0.5 percent.
C) lower the target federal funds rate by 1.5 percent.
D) raise the target federal funds rate by 0.5 percent.

103) Use the following formula for the Taylor rule

target federal funds rate = natural rate of interest + current inflation + ½(inflation gap) +½(output gap)

to determine the change in the target federal funds rate for every one percent increase in the rate of inflation. This will

A) increase the real federal funds rate by 1.5 percent.
B) increase the target federal funds rate by 1.5 percent.
C) increase the real federal funds rate by 0.5 percent.
D) increase the target federal funds rate by 1.5 percent and increase the real federal funds rate by 0.5 percent.

104) The measure for the actual rate of inflation used in the Taylor rule is the

A) personal consumption expenditure index.
B) GDP deflator.
C) consumer price index.
D) producer price index.

105) Recent research by Fed researchers put the natural rate of interest at what level as of late 2018?

A) −1 percent
B) 1/2 percent
C) 0 percent
D) 2 percent

106) Which one of the following would not be considered an unconventional monetary policy tool?

A) discount rate
B) policy duration commitment
C) quantitative easing
D) credit easing

107) Unconventional monetary policy tools include all of the following, except which one?

A) quantitative easing
B) forward guidance
C) targeted asset purchases
D) reserve requirement

108) The key to the success of forward guidance as a monetary policy tool is

A) timing.
B) a favorable exchange rate.
C) transparency.
D) credibility.

109) Forward guidance includes

A) statements today about policy targets in the future.
B) expansion of the supply of aggregate reserves beyond the amount needed to maintain the policy rate target.
C) asset purchases that shift the composition of the Fed’s balance sheet.
D) statements of policy changes and dates those changes will take effect.

110) Quantitative easing is

A) statements today about policy targets in the future.
B) expansion of the supply of aggregate reserves beyond the amount needed to maintain the policy rate target.
C) asset purchases that shift the composition of the Fed’s balance sheet.
D) expansion of the demand for aggregate reserves to drive down the IOER.

111) Targeted asset purchases are

A) statements today about policy targets in the future.
B) expansion of the supply of aggregate reserves beyond the amount needed to maintain the policy rate target.
C) asset purchases that shift the composition of the Fed’s balance sheet.
D) asset purchases that increase the reserves held by the federal government.

112) Unconventional policy tools are useful when

A) lowering the target interest rate to zero is not sufficient to stimulate the economy.
B) conventional policy tools result in shifts in the economy that are too large.
C) conventional policy tools support only growth in the economy.
D) restrictive monetary policy is necessary.

113) Raising interest rates following the use of unconventional policy tools depends on

A) the size and composition of the central bank’s balance sheet.
B) the toolbox available to the central bank.
C) both the size and composition of the central bank’s balance sheet and the toolbox available to the central bank.
D) neither the size and composition of the central bank’s balance sheet and the toolbox available to the central bank.

114) While GDP was once a key cyclical indicator, its usefulness has declined substantially for all of the following reasons except which one?

A) lack of timeliness
B) requires seasonal adjustment
C) constant revisions for decades
D) contains too much information