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:

Negative Emotionality

Refers to a personality trait characterized by a tendency to experience negative emotions such as anger, anxiety, or depression more frequently and intensely than others.

Emotions

Complex psychological states involving physiological arousal, expressive behaviors, and conscious experience.

Unstable Relationships

Relationships characterized by frequent changes or lack of consistency and security.

Depressive Episodes

Periods characterized by feelings of extreme sadness, hopelessness, and a lack of interest or pleasure in activities.