For the Fed to Use Money Growth as a Direct

question 32

Multiple Choice

For the Fed to use money growth as a direct monetary policy target, which of the following needs to exist?

• A) A highly variable deposit expansion multiplier
• B) A stable link between the monetary base and the quantity of money
• C) A predictable link between the quantity of money and the deposit expansion multiplier
• D) A stable link between the monetary base and the quantity of money and a predictable relationship between the quantity of money and the rate of inflation

---

Definitions:

Research Questions

Specific questions that a study seeks to answer, guiding the direction and focus of the research.

Double-Blind Study

A study design in which neither the participants nor the experimenters know who is receiving a particular treatment, to prevent bias in research results.

Experimental Design

A procedure in research for testing hypotheses where one or more variables are manipulated to determine their effect on a dependent variable.

Independent Variable

The variable in an experiment that is manipulated by the researcher to examine its effect on the dependent variable.