How does monetary policy offer help for weak econo

单项选择题

America’s economic recovery remains uncomfortably weak. The latest data show industrial production falling while the trade deficit soars to record levels. To round off a dismal week for economic statistics, the Fed (美联储) announced that industrial production fell by 0.2% in December compared with the previous month. That came as a disappointment to economists who had been expecting a small rise. Monthly data are always unreliable, of course; there is always a plausible explanation for unexpectedly bad (or good) news. But nearly all recent economic statistics point to the same conclusion--that America’s recovery remains sluggish and erratic. It could put pressure on the Fed to consider cutting interest rates again when its policymaking committee meets at the end of the month.
The biggest obstacle to healthier economic performance, though, is political. As the Fed’s chairman, Alan Greenspan, acknowledged in the closing months of 2002, uncertainty about the future is holding both investors and consumers back. The shadowy threat of international terrorism and the much more explicit prospect of a war with Iraq have made many Americans nervous about the future. For businesses still reeling from the speed at which the late-1990s boom turned to slump, the political climate is one more reason to put off investing in new plant and equipment or hiring new staff. For consumers, for so long the mainstay of the American economy, the thrill of the shopping mall seems, finally, to be on the wane.
It is hard to put a favorable interpretation on most of the data. But it is important to keep a sense of perspective. Some recent figures look disappointing partly because they fall short of over-optimistic forecasts -- a persistent weakness of those paid to predict the economic future, no matter how often they are proved wrong. The Fed will be watching carefully for further signs of weakness during the rest of the month. Mr. Greenspan is an avid, even obsessive, consumer of economic data. He has made it clear that the Fed stands ready to reduce interest rates again if it judges it necessary--even after 12 cuts in the past two years. At its last meeting, though, when it kept rates on hold, the Fed signaled that it did not expect to need to reduce rates any further.
Monetary policy still offers the best short-term policy response to weak economic activity, and with inflation low the Fed still has scope for further relaxation. President Bush’s much-vaunted fiscal stimulus is unlikely to provide appropriate help, and certainly not in a timely way.

How does monetary policy offer help for weak economic activity

A. It can stimulate investment in new plant and equipment.
B. It can reduce interest rates so as to stimulate weak economic activity.
C. The Fed tries to keep inflation low.
D. President Bush can offer appropriate monetary policy.