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

When it comes to choosing an policy instrument,both the ________ rate and ________ aggregates are measured accurately and are available daily with almost no delay.

Explain and demonstrate graphically how targeting the federal funds rate can result in fluctuations in nonborrowed reserves.

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.

Which of the following is not a disadvantage to inflation targeting?

Inflation results in

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

During World War II,the Fed in effect relinquished its control of monetary policy through its policy of

Which of the following is not an operating instrument?

The Fed accidentally discovered open market operations in the early

A nominal anchor promotes price stability by

The most common definition that monetary policymakers use for price stability is

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

The monetary policy strategy that provides the least accountability is

Either a dual or hierarchial mandate is acceptable as long as ________ is the primary goal in the ________.

Real interest rates are difficult to measure because

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

When compared to the Fed's ________ anchor approach,________ targeting can make the institutional framework for the conduct of monetary policy more consistent with democratic principles.

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.

High inflation can spiral out of control when

During the 1950s,Fed monetary policy targeted