Critics of the Fed's Use of Financial Variables as Targets

question 41

Multiple Choice

Critics of the Fed's use of financial variables as targets have proposed that the Fed

• A)use indicator variables such as nominal GDP, the yield curve, and the exchange rate.
• B)abandon open market operations and use only discount loans and changes in the required reserve ratio as tools.
• C)should concentrate solely on its role as lender of last resort.
• D)be made subordinate to the Treasury.

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Definitions:

Concurrent Quality Control

Quality control applied to work in progress.

Inferential Statistics

A branch of statistics that makes predictions or inferences about a population based on a sample of data.

Statistical Analysis

The collection, examination, interpretation, presentation, and organization of data using statistical methods and techniques.

Tolerance Ranges

The acceptable or permissible limits within which a product, process, or result can vary without affecting its quality or functionality.