Which of the following statements is FALSE? I. The Federal Reserve can micromanage the economy with great precision. II. The Federal Reserve's decisions usually have an immediate effect on the economy's unemployment rate. III. Most economists believe that the Federal Reserve does more harm than good.

Question

Quizplus · Accepted Answer

Statement I is false because the economy is complex and difficult to precisely control. The Federal Reserve's decisions may take time to have an effect or may have unintended consequences. Statement II is also false because the effects of the Federal Reserve's decisions are not always immediate, and there are many other factors that influence the unemployment rate. Statement III is a matter of opinion and cannot be proven true or false. However, most economists believe that the Federal Reserve does more good than harm in managing the economy.

Which of the Following Statements Is FALSE? I