Because the Fed's Current Tool for Changing the Interest Rate

Multiple Choice

Because the Fed's current tool for changing the interest rate is to change the ________, once the decision has been made to make the change, ________.

A) rate it pays on bank reserves; the implementation lag is usually very long
B) rate it pays on bank reserves; there is in effect no implementation lag
C) required reserve rate; the implementation lag is usually very long
D) required reserve rate; there is in effect no implementation lag