In its earliest years,the Federal Reserve's guiding principle for the conduct of monetary policy was known as the
A)real bills doctrine.
B)liberal liquidity doctrine.
C)free reserves doctrine.
D)quantity theory of money.

Question

Quizplus · Accepted Answer

The real bills doctrine was the earliest guiding principle for the conduct of monetary policy by the Federal Reserve. This doctrine suggested that the central bank should only lend to banks against high-quality short-term commercial and industrial bills, which would ensure that only creditworthy borrowers would receive credit and prevent inflationary pressures.

In Its Earliest Years,the Federal Reserve's Guiding Principle for the Conduct