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Explain Two Reasons Why the Fed Does Not Have Complete

question 46

Essay

Explain two reasons why the Fed does not have complete control over the level of bank deposits and loans. Explain how a change in either factor affects the deposit expansion process.


Definitions:

Mum Effect

The reluctance to communicate unfavorable news or feedback, often to avoid discomfort or conflict.

Voice

The expression of opinions or the ability to express one's thoughts and concerns in an organization or group setting.

Voice

The ability or opportunity to express opinions, concerns, or suggestions in order to influence decisions within an organization or group.

Silence

The absence of sound or the state of being quiet; can also imply non-communication or refusal to speak in the context of social interactions.

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