Some people have argued that the high inflation of the late 1970s was a consequence of the fact that Federal Reserve Board Chairman Arthur Burns did what President Richard Nixon wanted him to do. What policy do you think Nixon might have wanted?
Answer to relevant QuestionsHow might the ECB’s pursuit of price stability as its primary objective restrict its response to the sovereign debt crisis in the euro zone? The European Central Bank (ECB) has translated its primary objective of price stability into an explicit, quantitative goal of keeping euro-area annual inflation close to, but below, 2 percent over the medium term. Plot the ...When you withdraw cash from your bank’s ATM, what happens to the size of the Fed’s balance sheet? Is there any reason for the Fed to react to your action?Compute the impact on the money multiplier of an increase in the currency-to-deposit ratio from 10 percent to 15 percent when the reserve requirement is 10 percent of deposits, and banks’ desired excess reserves are 3 ...Plot on a weekly basis the ratio of currency (FRED code: CURRENCY) to checkable deposits (FRED code: TCD) from the start of 2000 through 2002. Download the data and identify the week of the downward spike in the graph. Do ...
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