Federal Reserve independence 1 Explain why time lags are a problem for the effective implementation

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Federal Reserve independence

1 Explain why time lags are a problem for the effective
implementation of fiscal policy

2 Explain what is meant by a structural deficit and how it
would differ from a cyclical deficit

3 List and discuss the functions of money

4 Explain what is meant by a “fractional” reserve
banking system How does this relate to a bank’s ability to create money?

5 Describe actions that the federal reserve might take in
pursuing a tight money policy

6 Explain what is meant by a “recessionary gap”

7 Discuss some of the constraints on monetary policy

8 Explain the process by which open market operations by
the Federal reserve can be used to increase the money supply

9 Discuss the various factors that underlie (contribute to)
the demand for money

10 Describe the causes of demand-pull inflation Be sure to
address the relationship between AS and AD

11 Explain why many economists consider Federal Reserve
independence to be critical to the effectiveness of monetary policy

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