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Homework answers / question archive / Federal Reserve chairman Ben Bernanke's move toward greater openness in the 2010s reflected which view of macroeconomics? a) Only rational expectations matter

Federal Reserve chairman Ben Bernanke's move toward greater openness in the 2010s reflected which view of macroeconomics? a) Only rational expectations matter

Economics

Federal Reserve chairman Ben Bernanke's move toward greater openness in the 2010s reflected which view of macroeconomics?

a) Only rational expectations matter.

b) Expectations matter, whether adaptive or rational.

c) Monetary policy should be active.

d) Expectations do not matter.

e) Monetary policy should be passive.

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The answer is C.

Ben Bernanke's move towards openness in 2010 reflected that monetary policy should be active. The 2010's conference, 'the formulation and conduct of monetary policy in low inflation environment' had the Fed Reserve chairman speak on ways of reducing inflation through advocating for the openness of the monetary policy. He suggested the application of enhanced policy frameworks that involve greater transparency and independent from politics.

Some steps were to get included to attain transparency, the evaluation of policies and clear explanation of policy alternatives to the public to help in forecasting the economy and comparing the forecasts and objectives of policies. Clear communication s essential, but more crucial during lo economic times as the understanding of individuals on the matters of the economy may reduce the economic uncertainties and enable households to make better-informed decisions.

Also, the precise information provided on the goals and the strategies to deal with the inflation can prepare the public for long term inflation possibilities and enhance the ability of the central bank to respond to the adverse shocks.

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