The Fed Uses Operating Targets as Well as Intermediate Targets

question 37

Multiple Choice

The Fed uses operating targets as well as intermediate targets because

• A)the Federal Reserve Act of 1913 requires it to do so.
• B)the Fed controls intermediate targets only indirectly.
• C)the public is much more unfamiliar with the variables used as operating targets, so for policy to be effective intermediate targets must also be announced.
• D)if one set of targets proves ineffective in attaining policy goals, the other set is available.

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