Article Summary In a September 2013 Speech to the Independent Bankers Association

question 66

Multiple Choice

Article Summary
In a September 2013 speech to the Independent Bankers Association of Texas, Federal Reserve Bank of Dallas president Richard Fisher stated that the Fed's credibility was harmed when it announced the previous week that it would continue its large bond purchasing program. In June, Fed Chairman Ben Bernanke had stated that that the program could begin to be cut back later in the year, and several other Fed officials expressed being open to the announced timing of this policy. Bernanke's change in his announced timeline of the Fed's intentions regarding the bond purchasing program brought criticism that the Fed had misled investors. In his speech, Fisher stated "I disagreed with the decision of the committee and argued against it. Doing nothing at this meeting would increase uncertainty about the future conduct of policy and call the credibility of our communications into question. I believe that is exactly what has occurred, though I take no pleasure in saying so." Fisher has been a long-time opponent of the Fed's bond purchasing program, claiming it is ineffective and may well lead to future inflation, and had been calling for the Fed to begin phasing out this program in September.
Source: "Fisher: Standing pat on policy hurt Fed's credibility," Reuters, September 23, 2013.

-Refer to the Article Summary.Richard Fisher brought the Fed's credibility into question when it decided to continue with its bond purchasing program despite leading many to believe that the program would begin to be phased out.Prior to this,over the past two decades whenever a change in Fed policy had been announced,the change has ________ taken place,leading to ________ credibility.

• A)rarely; greater
• B)actually; greater
• C)rarely; less
• D)actually; less

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Definitions:

Potential Project

A project that has the possibility to be developed or realized in the future, often in the planning or proposal stages.

Ballet Troupe

A group of ballet dancers who perform together, often as part of structured productions or tours.

Dyads

A group consisting of two persons, often used in the context of interpersonal relationships, communication studies, and social psychology.

Entitativity

The perception or quality of being a distinct entity, often used in social psychology to discuss how individuals perceive groups as coherent, unified wholes.