Fed Policy Procedures: Historical Perspective
1) The Fed”s failure to exercise effective control over the money supply during the 1979 1982 period
A) proves that such control is not possible.
B) resulted because forces outside of its control removed the link between open market operations and the money supply.
C) occurred despite evidence of a strong link between open market operations and the money supply.
D) stems from the Treasury Federal Reserve Accord.
2) 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.
A) borrowed reserves
B) nonborrowed reserves
C) excess reserves
D) required reserves
3) The strengthening of the dollar between 1980 and 1985 contributed to a ________ in American competitiveness, putting pressure on the Fed to pursue a more ________ monetary policy.
A) decrease; contractionary
B) increase; expansionary
C) increase; contractionary
D) decrease; expansionary