If the Fed Wishes to Maintain Its Interest Rate Target

question 37

Multiple Choice

If the Fed wishes to maintain its interest rate target in the face of increased money demand it would likely

• A) increase the money supply.
• B) decrease the money supply.
• C) more stringently enforce already existing banking regulations.
• D) propose new banking regulations.
• E) become more lax when it enforces already existing banking regulations.

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Definitions:

Nominal Group Technique

A structured method for group brainstorming that encourages contributions from everyone in the group by having members write down their ideas and then collectively discussing and ranking them.

Delphi Technique

A method used to gather data and achieve consensus among experts through multiple rounds of questioning and feedback.

Rational Decision-Making Technique

A systematic approach to make decisions that are logical and based on available information, without letting emotions interfere.

Punctuated Equilibrium Model

A theory in evolutionary biology that posits that species experience long periods of stability interrupted by brief phases of significant change.