Which of the Following Statements Is True

question 65

Multiple Choice

Which of the following statements is true?

• A)The Federal Reserve sets the federal funds rate.
• B)The Federal Reserve sets the target for the federal funds rate, and then uses the reserve ratio to push banks toward that target.
• C)The Federal Reserve does not set the federal funds rate, but historically has influenced it through the use of its open-market operations.
• D)The Federal Reserve will set a higher target for the federal funds rate if pursuing an expansionary monetary policy.

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