If the Fed Pursues a Strategy of Targeting an Interest

question 108

Multiple Choice

If the Fed pursues a strategy of targeting an interest rate when fluctuations in money demand are prevalent

• A)fluctuations of nonborrowed reserves will be small.
• B)fluctuations of nonborrowed reserves will be large.
• C)the Fed will probably quickly abandon this policy,as it did in the 1960s.
• D)the Fed will probably quickly abandon this policy,as it did in the 1950s.

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Definitions:

Eastern Europe

Eastern Europe refers to the region encompassing the eastern part of the European continent, characterized by its distinct cultural, historical, and political attributes.

Tariff Barriers

Taxes imposed on imported goods to protect domestic industries from foreign competition and to raise government revenue.

Totalitarian

A political system in which the state holds total authority over the society and seeks to control all aspects of public and private life.

Joseph Stalin

The leader of the Soviet Union from the mid-1920s until his death in 1953, known for his totalitarian rule, the purges, and the extensive use of the Gulag system.