True or False:
1. The length and variability of the impact lag before the effects of monetary policy on output and employment are felt longer and are more variable than for fiscal policy.
2. The Fed can change the environment in which banks act, but the banks themselves must take the steps necessary to increase or decrease the supply of money.
3. If the Fed raises bank reserve requirements, sells bonds, and/or raises the discount rate, banks will call in loans that are due for collection, sell secondary reserves, and so on, to obtain the necessary reserves; and in the process of contracting loans, they decrease the supply of money.
4. When the Fed is trying to constrain monetary expansion, it often has difficulty in getting banks to make appropriate responses.
5. When the Federal Reserve wants to induce monetary expansion, it can provide banks with excess reserves; but it cannot force the banks to make loans, thereby creating new money.
6. Banks maintaining excess reserves hinder attempts by the Fed to induce monetary expansion.
7. The Fed may be able to predict the impact of its monetary policies on loans by member banks, but the actions of global and nonbanking institutions can serve to offset, at least in part, the impact of monetary policies adopted by the Fed on the money and loanable funds markets.
8. The Fed can precisely control the short-run real interest rates through its monetary policy instruments.