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The Economics of Money, Banking, and Financial Markets, 9e Mishkin Chapter 16 The Conduct of Monetary Policy: Strategy and Tactics 16.1 Monetary Targeting 1 Under monetary targeting, a central bank announces an annual growth rate target for ________. A a monetary aggregate B a reserve aggregate C the monetary base D GDP Answer: A Ques Status: Previous Edition 2 During the years 1979 to 1982, the Federal Reserves announced policy was monetary targeting. During this time period the Federal Reserve A hit all of their monetary targets. B did not hit any of their monetary targets because it is believed that controlling the money supply was not the intent of the Federal Reserve. C did not hit any of their monetary targets because they were unrealistic. D hit about half of their monetary targets. Answer: B Ques Status: Previous Edition 3 Compared to the United States, Japans experience with monetary targeting performed A better with regard to the inflation rate and output fluctuations. B worse with regard to the inflation rate and output fluctuations. C better with regard to the inflation rate, but worse with regard to output fluctuations. D worse with regard to the inflation rate, but better with regard to output fluctuations. Answer: A Ques Status: Previous Edition 4 One of the factors that contributed to the success German policymakers had using a monetary targeting type policy was that A they used a rigid target for the money growth rate. B they implemented policy so their inflation rate goal was met in the short run. C the money target was flexible to allow the Bundesbank to concentrate on other goals as needed. D they rarely communicated the intentions of policy to the public in order to keep the public from panicking. Answer: C Ques Status: Previous Edition 5 Which of the following is the best description of the monetary policy strategy followed by the European Central Bank ECB ? A The ECB follows monetary targeting. B The ECB