The Fed's failure to exercise effective control over the money supply during the 1979-1982 period
A)proves that such control is not possible.
B)resulted because forces outside of its control removed the link between open market operations and the money supply.
C)occurred despite evidence of a strong link between open market operations and the money supply.
D)stems from the Treasury-Federal Reserve Accord.

Question

Quizplus · Accepted Answer

The Fed's failure occurred despite evidence of a strong link between open market operations and the money supply, indicating that the issue was not the absence of a link but rather the Fed's inability to effectively manage it during that period.

The Fed's Failure to Exercise Effective Control Over the Money