A Problem That the Fed Faces When It Attempts to Control

question 82

Multiple Choice

A problem that the Fed faces when it attempts to control the money supply is that

• A)the 100-percent-reserve banking system in the U.S.makes it difficult for the Fed to carry out its monetary policy.
• B)the Fed has to get the approval of the U.S.Treasury Department whenever it uses any of its monetary policy tools.
• C)the Fed does not have a tool that it can use to change the money supply by either a small amount or a large amount.
• D)the Fed does not control the amount of money that households choose to hold as deposits in banks.

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Definitions:

Generalization Gradients

In learning theory, the range and degree to which a learned response is produced to stimuli that vary from the original conditioned stimulus.

Discrimination Training

The process in behavioral psychology of training an organism to respond differently to distinct stimuli, enhancing its ability to distinguish between them.

Inhibitory Generalization

The process by which an organism learns to inhibit responses to stimuli that are similar to a conditioned stimulus that signals an aversive event.

Training Stimulus

A specific condition or event presented during training to elicit and reinforce desired behaviors or responses.