Describe,in General Terms,the Strategy of Monetary Policy,explaining How Monetary-Policy Tools

question 27

Essay

Describe,in general terms,the strategy of monetary policy,explaining how monetary-policy tools are used to achieve the goals of monetary policy.What intermediate stages are important in going from tools to goals? What are the links between the different stages? How does the Federal Reserve use this strategy today?

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Definitions:

Attitude Strength

The durability and impact of an attitude on behavior and thoughts, with stronger attitudes being more consistent, resistant to change, and predictive of behavior.

Cognitive Dissonance

The mental discomfort experienced by an individual who holds two or more contradictory beliefs, ideas, or values simultaneously.

Subjective Norm

The perceived social pressure to engage or not engage in a particular behavior, based on the individual's belief about what important others think they should do.

Belief Hypocrisy

The condition of holding beliefs that one's own behavior does not conform to, often leading to cognitive dissonance when recognized.