The Fed operating procedures employed between 1979 and 1982 resulted in ________ swings in the federal funds rate and ________ swings in the M1 growth rate.
A)increased;increased
B)increased;decreased
C)decreased;decreased
D)decreased;increased

Question

Quizplus · Accepted Answer

Between 1979 and 1982, the Federal Reserve, under Chairman Paul Volcker, shifted its focus towards controlling the money supply (M1) to combat inflation, leading to increased volatility in both the federal funds rate and the M1 growth rate. This approach often resulted in significant fluctuations in interest rates as the Fed aggressively targeted money supply growth rates.

The Fed Operating Procedures Employed Between 1979 and 1982 Resulted