Question 10

Congress can impose ____ on monetary policymakers through court hearings.

	A.	information requirements
	B.	responsibility
	C.	benefit
	D.	cost

Question 9

Was Paul Volker independent from outside pressures?

	A.	No, support from fiscal authorities was necessary to sustain an unpopular policy
	B.	No, interest rates should have been lowered
	C.	Yes, he resisted fiscal authorities to fight inflation
	D.	Yes, he resisted President Carter's criticism

Question 8

True operational independence for the FED is...

	A.	limited
	B.	robust
	C.	lacking
	D.	exorbitant

Question 7

As a result the expanding the balance sheet the Fed...

	A.	the balance sheet was disconnected from interest rate targeting policies
	B.	the FED was no longer able to change interest rates
	C.	the FED could no longer choose what stayed on the balance sheet and what rolled off
	D.	the balance sheet was no longer a financial instrument

Question 6

Appointment power gives the President the ability to direct Fed policy.

True

False

Uncertainty stemming from discretionary monetary policy causes...

	A.	nothing
	B.	internal pressures
	C.	external pressures
	D.	internal and external pressures

Question 4

The only way to eliminate the incentive problem is...

	A.	to bind the hands of monetary authorities with a pseudo-monetary rule
	B.	to bind the hands of monetary authorities with a monetary rule
	C.	to free up monetary authorities from monetary rules
	D.	to give monetary authorities discretion in their decision-making

Question 3

Why does Milton Friedman believe the Fed is unwilling to change its methods of operation?

	A.	inertia
	B.	private bank interference
	C.	using too many academic economists as chairmen
	D.	bad faith actions

Question 2

Why did Congress introduce legislation that would have given the votes of the Federal Reserve Bank Presidents to political appointees in the wake of the 2008 crisis?

	A.	They were unhappy with the size of the interventions
	B.	They were unhappy with the extent of the interventions
	C.	They were unhappy with the size and extent of the interventions
	D.	They were unhappy with the nature of the interventions

Question 1

Economists tend to ignore that institutions matter in applied work.

True

False