Exam 16: The Conduct of Monetary Policy: Strategy and Tactics

High unemployment is undesirable because it

The Fed accidentally discovered open market operations when

Using Taylor's rule,when the equilibrium real federal funds rate is 2 percent,there is no output gap,the actual inflation rate is zero,and the target inflation rate is 2 percent,the nominal federal funds rate should be

The European Central Bank (ECB)pursues a hybrid monetary policy strategy that has elements in common with the -targeting strategy previously used by the Bundesbank but also includes some elements of targeting.

Which of the following is NOT an operating instrument?

The theory that monetary policy conducted on a discretionary,day-by-day basis leads to poor long-run outcomes is referred to as the

The mandate for the monetary policy goals that has been given to the Federal Reserve System is an example of a ________ mandate.

Foreign exchange rate stability is important because a decline in the value of the domestic currency will ________ the inflation rate,and an increase in the value of the domestic currency makes domestic industries ________ competitive with competing foreign industries.

The goal for high employment should be a level of unemployment at which the demand for labor equals the supply of labor.Economists call this level of unemployment the

Which of the following is not a disadvantage of of the Fed's "just do it" approach to monetary policy?

The time-inconsistency problem in monetary policy can occur when the central bank conducts policy

Although the Fed professed employment of ________ targeting during the 1970s,its behavior suggests that it emphasized ________ targeting.

Monetary policy is considered time-inconsistent because

The Fed-Treasury Accord of March 1951 provided the Fed greater freedom to

Compared to the United States,Japan's experience with monetary targeting during the 1978--1987 period performed

Unemployment resulting from a mismatch of workers' skills and job requirements is called

The rate of inflation increases when

International policy coordination refers to

The time-inconsistency problem with monetary policy tells us that,if policymakers use discretionary policy,there is a higher probability that the ________ will be higher,compared to policy makers following a behavior rule.

Large fluctuations in money supply growth and smaller fluctuations in the federal funds rate between October 1982 and the early 1990s indicate that the Fed had shifted to ________ as an operating target.