Between 1990 and 1992, the Fed Conducted Monetary Policy Almost

question 36

Multiple Choice

Between 1990 and 1992, the Fed conducted monetary policy almost entirely with reference to interest rates since

• A)banks rationed credit
• B) the economy grew at a very fast pace
• C)the growth rates of different monetary aggregates diverged widely
• D)the objective was to increase the profitability of banks
• E)the objective was to keep money supply stable

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Definitions:

Spillover Costs

Costs of production that affect people who have no control over or involvement in the production process, also known as externalities.

Excise Taxes

A tax levied on specific goods or commodities produced or sold within a country, such as alcohol, cigarettes, and gasoline.

Government Intervention

Actions taken by a government to influence or regulate various activities within its economy, such as imposing taxes, subsidies, and regulations.

External Costs

Costs incurred by society as a whole due to economic activities but not reflected in the market price or borne by the producer or consumer involved.