Which of the Following Are Reasons That Caused the Fed

question 20

Multiple Choice

Which of the following are reasons that caused the Fed to abandon its practice of setting money supply targets?
I. expiration of the legislation requiring the Fed to do so
II. banking deregulation in the 1980s allowing for MMDAs
III. financial development of retail sweep programs

• A) I and II only
• B) II and III only
• C) I and III only
• D) I, II, and III

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Definitions:

Sell-Offs

Rapid selling of securities or assets by investors, often due to the anticipation of lower prices.

Spin-Offs

Businesses or units that were once part of a larger company but have been separated to form a new independent entity.

Corporate Bonds

Debt securities issued by corporations to finance their operations, projects, or expansion, which pay interest to investors until maturity, at which point the principal amount is repaid.

Commercial Paper

An unsecured, short-term debt instrument issued by corporations, typically used for the financing of payroll, accounts payable and inventories, and meeting other short-term liabilities.