Bank lending and deposits tend to change as interest rates change. Can the Fed counteract this tendency?
a. Yes, through its ability to affect the money supply.
b. Yes, through its ability to change tax levels.
c. No, the Fed is forbidden by the Constitution from intervening in the economy.
d. No, the Fed almost always follows a passive monetary policy.
a
Economics
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Checking deposits are included in
A) M1 only. B) M2 only. C) M1 and M2. D) neither M1 nor M2.
Economics
In practice, the Fed's policy of targeting ________ in the 1960s proved to be ________, destabilizing the economy
A) money market conditions; countercyclical B) money market conditions; procyclical C) monetary aggregates; countercyclical D) monetary aggregates; procyclical
Economics