Question

The Fed’s control of the money supply is not precise because a. Congress can also make changes to the money supply. b. there are not always government bonds available for purchase when the Fed wants to perform open-market operations. c. the Fed does not know where all U.S. currency is located. d. the amount of money in the economy depends in part on the behavior of depositors and bankers.

Answer 1

The correct answer is (d)

Step-by-step explanation:

The Fed doesn't have exact power over the cash supply on the grounds that the multiplier connecting the fiscal base and the cash supply isn't exceptionally steady or unsurprising, particularly in the short run. The cash supply is at last constrained by people in general, the banks, and the Fed. People in general chooses the amount of the fiscal base they will store in banks and the amount they will hold as money in the hands of the general population.