Exam 19: The Conduct of Monetary Policy: Strategy and Tactics

The ________ problem of discretionary policy arises because economic behavior is influenced by what firms and people expect the monetary authorities to do in the future.

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

During World War II, whenever interest rates would rise and the price of bonds would begin to fall, the Fed would

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 Fed accidentally discovered open market operations when

Which of the following is not a requirement in selecting a policy instrument?

The type of monetary policy regime that the Federal Reserve has been following in recent years can best be described as

The "Greenspan doctrine" - central banks should not try to prick bubbles - was based on which of the following arguments?

The problems of raising the level of the inflation target include

If the central bank targets a monetary aggregate, it is likely to lose control over the interest rate because

Real interest rates are difficult to measure because

Supply-side economic policies seek to

Monetary policy is considered time-inconsistent because

Targeting interest rates can be procyclical because

A nominal variable, such as the inflation rate or the money supply, which ties down the price level to achieve price stability is called ________ anchor.

The rate of inflation tends to remain constant when

The guiding principle for the conduct of monetary policy that held that as long as loans were being made for "productive" purposes, then providing reserves to the banking system to make these loans would not be inflationary became known as the

Explain the Taylor rule, including the formula for setting the federal funds rate target, and the components of the formula. If the Fed were to use this rule, how many goals would it use to set monetary policy?

Which of the following criteria need not be satisfied for choosing a policy instrument?

When asset prices increase above their fundamental values it is called an