Does the Fed Have Good Control Over the Money Supply

question 114

Multiple Choice

Does the Fed have good control over the money supply?

• A)Yes, open-market operations generate exact changes in bank lending.
• B)Yes, reserve requirements create new loans.
• C)No, because of difficulties estimating the reserve ratio.
• D)No, because of difficulties estimating the size of the excess reserves and cash holdings by the public.

---

Definitions:

Syntactical Inference

The process of deriving meaning or conclusions from the structure and order of words in a sentence.

Selective Looking Experiment

A selective looking experiment investigates how people can focus their attention on a specific task or object while ignoring other stimuli, demonstrating selective attention.

Function Words

Function words are words that have little lexical meaning or have ambiguous meaning but serve to express grammatical relationships among other words within a sentence, such as prepositions, pronouns, articles, conjunctions, and auxiliary verbs.

Multisyllabic Words

Words composed of more than one syllable, contributing to the complexity of language and its comprehension.