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

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

A nominal anchor promotes price stability by

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

________ bubble is driven entirely by unrealistic optimistic expectations.

The Federal Reserve System was created to

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

During the 1950s, the Fed targeted

Explain the time-inconsistency problem. What is the likely outcome of discretionary policy? What are the solutions to the time-inconsistency problem?

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

Fed policy since the early 1990s indicates that it is pursuing a policy of targeting the

In the 1970s, the Fed selected an interest rate as an operating target rather than a reserve aggregate primarily because it

Suppose interest rates are kept very low for a long time such that there is a spike in the amount of lending. Everything else held constant, this could cause ________ bubble.

The Fed operating procedures employed between 1979 and 1982 resulted in ________ swings in the federal funds rate and ________ swings in the M1 growth rate.

Which of the following is not an operating instrument?

In both New Zealand and Canada, what has happened to the unemployment rate since the countries adopted inflation targeting?

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

High unemployment is undesirable because it

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

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

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