The Reason Why Some Economists Believe That Attempts by the Fed

question 2

Multiple Choice

The reason why some economists believe that attempts by the Fed to surprise the public in a systematic way cannot be successful is that

• A)information about the Fed's plans will inevitably be leaked to the public.
• B)the Fed announces its goals before Congress and publishes its policy actions in the Federal Reserve Bulletin six weeks after they take place.
• C)the public would eventually figure out what the Fed's policies were, negating the Fed's surprise.
• D)competition in the money markets would neutralize the Fed's intervention.

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Definitions:

Debts Of Entity

Financial obligations that a company or individual owes to external parties or creditors.

Monetary Unit Assumption

An accounting principle that assumes money is the common denominator of economic activity and provides an appropriate basis for accounting measurement and analysis.

GAAP

Stands for Generally Accepted Accounting Principles; these are a common set of accounting principles, standards, and procedures that companies must follow when they compile their financial statements.

Corporation

A legal entity owned by shareholders, recognized as a separate entity from its owners, with rights and liabilities distinct from those of its members.