The Fed Prefers to Focus on the Interest Rate Rather

question 94

Multiple Choice

The Fed prefers to focus on the interest rate rather than growth in the money supply because

• A)it does not like to conduct open market operations.
• B)the money supply is too unpredictable.
• C)it makes inflation more predictable.
• D)money demand is too volatile.
• E)it is easier to fix the interest rate than maintain growth in the money supply.

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Definitions:

Bronchial Arteries

Arteries that provide oxygenated blood to the bronchi and connective tissue of the lungs.

Abdominal Aorta

The largest artery in the abdominal cavity, supplying blood to most of the abdominal organs.

Pneumothorax

A medical condition where air enters the space between the lung and chest wall, causing the lung to collapse.

Respiratory Distress Syndrome

A serious condition that affects the lungs, characterized by insufficient surfactant leading to lung collapse, common in premature infants.