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

Which of the following is not an advantage of inflation targeting?

Since the early 1990s,the Fed has conducted monetary policy by setting a target for the

The Fed can engage in preemptive strikes against a rise in inflation by ________ the federal funds interest rate; it can act preemptively against negative demand shocks by ________ the federal funds interest rate.

Due to the lack of timely data for the price level and economic growth,the Fed's strategy

The Fed accidentally discovered open market operations in the early

In its earliest years,the Federal Reserve's guiding principle for the conduct of monetary policy was known as the

Using Taylor's rule,when the equilibrium real federal funds rate is 3 percent,the positive output gap is 2 percent,the target inflation rate is 1 percent,and the actual inflation rate is 2 percent,the nominal federal funds rate target should be

Fluctuations in the demand for reserves cause the Fed to lose control over a monetary aggregate if the Fed targets

Which of the following is NOT an argument against using monetary policy to prick asset-price bubbles?

The rate of inflation increases when

During the 1950s,the Fed targeted

The real bills doctrine was the guiding principle for the conduct of monetary policy during the

According to the Taylor Principle,when the inflation rate rises,the nominal interest rate should be ________ by ________ than the inflation rate increase.

Which of the following is the best description of the monetary policy strategy followed by the European Central Bank (ECB)?

Under monetary targeting,a central bank announces an annual growth rate target for ________.

The decision by inflation targeters to choose inflation targets ________ zero reflects the concern of monetary policymakers that particularly ________ inflation can have substantial negative effects on real economic activity.

The Fed's failure to exercise effective control over the money supply during the 1979-1982 period

The monetary policy strategy that provides the least accountability is

The Fed's use of the ________ as an operating target in the 1970s resulted in ________ monetary policy.

Estimates suggest that,in the United States economy,it takes just over ________ for monetary policy to affect output and just over ________ for monetary policy to affect the inflation rate.