Questions from Financial Markets

Q: The main purpose of term auction lending was to:

The main purpose of term auction lending was to:

Q: Scott suffers from what Simon Johnson calls “intellectual capture.” What

Scott suffers from what Simon Johnson calls “intellectual capture.” What does that mean?

Q: Explain why deflation leads to an increase in the real burden of

Explain why deflation leads to an increase in the real burden of debt.

Q: Explain why some argue that a central bank’s goal of price level

Explain why some argue that a central bank’s goal of price level stability can hurt the middle class and working people while benefiting more wealthy individuals.

Q: Under price level-targeting monetary policy, a sharp drop in

Under price level-targeting monetary policy, a sharp drop in the inflation rate today means what for the future?

Q: Some argue the Federal Reserve should not have “high employment”

Some argue the Federal Reserve should not have “high employment” as one of the goals of monetary policy because there are so many causes of unemployment that are beyond the Fed’s control. What are the...

Q: Opponents of the “financial market stability goal” of monetary policy

Opponents of the “financial market stability goal” of monetary policy believe it may be difficult for the Federal Reserve, or any central bank, to achieve this goal. Explain their argument.

Q: The “dual goals” of current monetary policy in the United

The “dual goals” of current monetary policy in the United States are:

Q: Explain how the time inconsistency problem in monetary policy is used by

Explain how the time inconsistency problem in monetary policy is used by many to argue in favor of central bank independence.

Q: Explain why many economists argue the explicit inflation target for monetary policy

Explain why many economists argue the explicit inflation target for monetary policy is far too rigid to be effective.