In the "old days" (prior to 2008), the Fed typically conducted monetary policy by:
A. buying long-term assets like mortgage-backed securities.
B. adjusting government spending and taxation.
C. changing the interest rate that it paid banks on their reserves.
D. targeting the federal funds rate with open market operations.
Ans: D. targeting the federal funds rate with open market operations.
You might also like to view...
Suppose shoppers typically pay twice as much for frozen "convenience" foods compared to similar dinners they could prepare themselves. An economist would say
A) the purchase is inefficient because the consumer doesn't really need to pay twice as much for essentially the same dinner. B) the purchase is inefficient because the frozen dinner is of even lower quality than the homemade dinner, yet twice as expensive. C) the purchase is efficient if the consumer feels the savings in preparation time justifies the higher price. D) the purchase is efficient, but the consumer is still probably behaving irrationally.
Which of the following is one of the most widely followed stock indexes in the United States?
A) the Fortune 500 B) the Securities and Exchange Commission C) the Dow Jones Industrial Average D) the Chicago Mercantile Exchange