Exam 5: Monetary Policy in the United States

The standard way of measuring ________ is the change in a major price index.

The Fed cannot, with any of its monetary tools (open market operations, discount rates, etc.), directly influence such complex economic variables as ________.

Which of the below has occurred during the 21st Century?

One historic consequence of the policy of supplying reserves according to movements in the fed funds rate was that the Fed did not concern itself ________.

The targets of Fed policy have changed many times in the past 25 years.

In some countries, a key foreign currency exchange rate may well function as an ________.

Overall during Greenspan's tenure there were two recessions, ________.

The Fed can be certain how much impact any change in reserves will have on short-term rates.

Intermediate targets may include monetary aggregates and interest rates, but never include foreign currency exchange rates.

________ is a condition of both inflation and recession.

During 1997/1998, with strong economic growth and unemployment decreasing, Alan Greenspan and the Fed were faced with a dilemma. What was this dilemma?

During March 2008, the Fed introduced a new lending facility, called the Primary Dealer Credit Facility, for investment banks and securities dealers. Briefly explain the purpose of this new facility and how it contrasts with that used by commercial banks.

An easy money policy of expanding the money supply (that is, stimulating higher growth rates for one or more monetary aggregates) may appear to promote ________, but it may also raise the prospect of inflation, affect the exchange rate disadvantageously, and increase interest rates.

The Fed, in interaction with banks and other units of the economy, create ________.

The Fed seeks to achieve its goals through a form of chain reaction. Describe the chronology and structure of this chain reaction explaining how operating and intermediate targets are used to achieve the Fed's ultimate goals?

Policies expanding the money supply and stimulating growth are beneficial for all circumstances.

Inflation in advanced economies is ________ the result of excessive demand due to monetary or fiscal policy.

The expansion in the monetary aggregates was particularly rapid from 1975 to 1978, and that expansion (along with the oil shocks) led to ________.

In the Keynesian view, the Fed's decision to reduce the fed funds rate, by increasing the banking system's excess reserves, should have consequences. Which of the below is NOT one of these consequences?

Which of the below statements is FALSE?