4. Discuss whether the change in the balance of the objectives of the Federal Reserve over the years is a product of:

(a) our greater knowledge of economics;

(b) shifts in the balance of economic power within the country;

(c) fashion (doing what other monetary authorities do).

442 MONETARY ECONOMICS bank charters state-chartered banks federal-chartered banks multi-bank panics elastic currency Federal Open Market Committee

(FOMC)

monitoring ranges lagged reserve accounting contemporaneous reserve accounting discount window federal funds rate reserve ratios matched transactions frown costs (non-pecuniary costs)

open market operations central bank independence transparency accountability