In Recent Years,the Fed Has Chosen to Target Interest Rates

question 191

Multiple Choice

In recent years,the Fed has chosen to target interest rates rather than the money supply because

• A)Congress passed a law requiring them to do so.
• B)the President requested them to do so.
• C)the money supply is hard to measure with sufficient precision.
• D)changes in the interest rate change aggregate demand,but changes in the money supply do not.

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Definitions:

Inventory

Items or goods held by a company for the purpose of sale or production, including raw materials, work-in-progress, and finished goods.