cap 10

6.During the 1982 recession in the USA, when a reporter asked what it

would take to ease the Fed's "tight" monetary policy, Fed chairman Paul

Volcker reportedly replied that it would take his own impeachment.

(a) Why would a Fed chairman want the public to believe that he

had such a single-minded devotion to lowering the inflation rate?

(b) Why might even such a strong declaration be ineffective at convincing

the public?