The effectiveness of the federal funds rate as an operating target is limited because
A) the Treasury often uses federal funds market.
B) reserve requirements often change.
C) the demand for reserves is difficult to predict.
D) the deposit expansion multiplier is difficult to predict.
C
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If the exchange rate rises, the quantity of dollars supplied
A) decreases, and there is movement down along the supply curve. B) increases, and there is movement up along the supply curve of dollars. C) increases with movement down along the supply curve. D) does not change. E) increases, and there is movement down along the supply curve.
What happens to the monetary base if the domestic currency is undervalued (the central bank fixed the exchange rate below equilibrium) and the central bank intervenes to fix the exchange rate at its current level?
a. The change in the monetary base is ambiguous. b. The monetary base is only affected by interventions of the central bank when the domestic currency is overvalued. c. The monetary base will rise. d. The monetary base is never affected by interventions of the central bank. e. The monetary base will fall.
The economic term for a firm that is the sole buyer in a market is:
A. monopsonist. B. monopolist. C. bilateral competitor. D. bilateral monopolist.
Which one of the following is TRUE?
A. A well-defined system of property rights benefits only the wealthy, and consequently it produces income inequality that will stifle economic growth. B. Restricting imports will enhance a country's economic growth. C. For every country that experiences an increase in its growth rate, there must be another experiencing a decline. D. Small changes in the annual growth rate amount to a measurable difference in the long-term growth trend of a country.