The Fed's Monetary Policy Tools

question 28

Multiple Choice

The Fed's monetary policy tools

• A)have proven to be of little value in helping the Fed to achieve its monetary policy goals.
• B)have allowed the Fed to achieve its monetary policy goals directly.
• C)have allowed the Fed to achieve its monetary policy goals indirectly.
• D)are no longer as effective in achieving its monetary policy goals, due to restrictive legislation passed by Congress in the 1990s.

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Definitions:

Power Distance

The extent to which less powerful members of organizations and institutions accept and expect that power is distributed unequally.

Group Development

The process through which a group evolves and progresses in terms of structure, interaction, and achieving collective goals.

Formalization

Formalization refers to the process of defining and instituting formal rules, procedures, and structures within an organization to standardize operations.

Coordination

The act of organizing or aligning activities, tasks, or individuals to operate efficiently towards a common goal.