How Does the Fed Decide Which Monetary Measure Should Be

Multiple Choice

How does the Fed decide which monetary measure should be the focus of its monetary policy choices?

A) The Fed would like to track a monetary measure that is most closely related to the market interest rate.
B) The Fed would like to track a monetary measure that is most closely related to the quantity of money demanded by economic agents.
C) The Fed would like to track a monetary measure that is most closely related to the level of real GDP and the price level.
D) The Fed would like to track a monetary measure that is most closely related to government spending.