Solved

Why Doesn't the Fed Have Both a Money Supply Target

Question 210

Multiple Choice

Why doesn't the Fed have both a money supply target and an interest rate target?


A) Short-term interest rates do not respond to changes in the money supply,which the Fed can control.
B) The Fed does not control money demand.
C) The Fed cannot offset the impact of changes in cash management by the public or changes in lending policies of commercial banks on the money supply.
D) Only the level of interest rates matters when we consider rates of growth in real GDP,employment,and rates of price inflation.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions