Homework answers / question archive / Which of the following is NOT a lesson to draw from the work of the Federal Reserve under Chairman Volcker when combatting stagflation? (a) fiscal policy is a critical complement to monetary policy when fighting high inflation rates; (b) choking off the supply of bank reserves can strangle money supply growth; (c) the process of strangling money supply growth reduces inflation expectations and eventually brings down long-term interest rates; (d) lower long-term interest rates would help to stimulate demand for the most interest-rate sensitive components of the economy

Which of the following is NOT a lesson to draw from the work of the Federal Reserve under Chairman Volcker when combatting stagflation? (a) fiscal policy is a critical complement to monetary policy when fighting high inflation rates; (b) choking off the supply of bank reserves can strangle money supply growth; (c) the process of strangling money supply growth reduces inflation expectations and eventually brings down long-term interest rates; (d) lower long-term interest rates would help to stimulate demand for the most interest-rate sensitive components of the economy

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Which of the following is NOT a lesson to draw from the work of the Federal Reserve under Chairman Volcker when combatting stagflation? (a) fiscal policy is a critical complement to monetary policy when fighting high inflation rates; (b) choking off the supply of bank reserves can strangle money supply growth; (c) the process of strangling money supply growth reduces inflation expectations and eventually brings down long-term interest rates; (d) lower long-term interest rates would help to stimulate demand for the most interest-rate sensitive components of the economy. 61. In response both to Great Financial Crisis and the Covid-19 Crisis, the Federal Reserve: (a) performed reverse repurchase agreements daily; (b) engaged in permanent open market operations that expanded the Fed's asset holdings; (c) sold Treasury securities and sold mortgage-backed securities; (d) increased its federal funds target range to between 2.00% and 2.25%. 62. The possibility that even a relatively or seemingly minor event somewhere in the world could spread and disrupt the entire real economy is known as: (a) operational risk; (b) credit risk (c) a liquidity trap; (d) systemic risk. 63. A key function of microprudential supervision is to uncover: (a) the most effective monetary policy tools; (b) banking practices that jeopardize the safety and soundness of the financial system; (c) digital threats to the real economy: (d) obsolete international agreements hampering the U.S. banking system. 64. Development of new housing tracts in New Mexico is counted in GDP under: (a) personal consumption expenditures for durable goods; (b) personal consumption expenditures on housing services; (c) gross private domestic investment; (d) business fixed investment. (Ctrl) -