Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 29 - Part X - The Monetary System - Questions for Review - Page 630: 10

Answer

The Fed cannot control the money supply perfectly they cannot control the amount of money that consumers will deposit and also the amount that banks will lend. Both of these greatly limit the Fed from absolute control of the money supply.

Work Step by Step

This question tests your knowledge of how the Fed is limited.
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