Question

"The Fed can perfectly control the amount of the monetary base, but has less control over the composition of the monetary base.” Is this statement true, false, or uncertain? Explain.

Short answer

False. Since the Fed can't handle how much rebate loaning to monetary organizations, it doesn't have ideal command over the monetary base.

Step-by-step solution

Concept Introduction

Fed cannot control the amount of discount lending to financial institutions

Explanation

Since the Fed can't handle how many markdowns loaning to monetary foundations, it doesn't have perfect command over the number of reserves, and hereafter doesn't have great command over the monetary base.

Final Answer

False