A Problem That the Fed Faces When It Attempts to Control

question 1

Multiple Choice

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

• A)since the U.S.has a fractional-reserve banking system,the amount of money in the economy depends in part on the behavior of depositors and bankers.
• B)the Fed has to get the approval of the U.S.Treasury Department whenever it uses any of its monetary policy tools.
• C)while the Fed has the ability to change the money supply by a large amount,it does not have the ability to change it by a small amount.
• D)federal legislation in the 1950s stripped the Fed of its power to act as a lender of last resort to banks.

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Definitions:

Identity Diffusion

The status of adolescents who consider various identity alternatives but never commit to one or never even consider identity options in any conscious way.

Identity Foreclosure

A stage in Erikson's theory of identity development where an individual commits to an identity without exploring other options.

Authoritarian Behavior

The enforcement of strict obedience to authority at the expense of personal freedom.

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