In conducting monetary policy, how has the Federal Reserve enhanced its credibility?
A) by revealing the Fed's target for the federal funds rate
B) by marketing and increased expenditure on advertising
C) by not following through with changes it has announced
D) by keeping the minutes of the open market committee meetings confidential
A
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What is one reason "micro-managers" might be less successful than so-called "delegators"?
A) Delegators are smarter. B) Delegators enjoy increasing returns to scale. C) Micro-managers suffer decreasing returns to scale. D) Micro-managers have constant returns to scale.
If the Fed sells U.S. government securities to drain reserves from banks, which of the following is most likely to occur? a. The demand for money will increase and the interest rate will rise
b. The money supply will increase and the interest rate will fall. c. The interest rate will rise and the quantity of money demanded will fall. d. The money supply will decrease and the interest rate will fall. e. The interest rate will fall and the quantity of money demanded will increase.