Which of the Below Statements Is FALSE

question 47

Multiple Choice

Which of the below statements is FALSE?

• A) An important point about the operating target is that the Fed must choose either a short-term rate or the level of some reserves and cannot choose to target both kinds of variables.
• B) As the Fed supplies more reserves and banks gain more ability to make more loans and buy other assets, the short-term rates fall; as the Fed withdraws reserves and reduces the banks' lending capacity, the short-term rates rise.
• C) The Fed cannot know or predict the public's demand for money, which is the aggregate demand for holding some of its wealth in the form of liquid balances, such as bank deposits.
• D) The least known of the intermediate targets is the money supply, measured by one of the more inclusive monetary aggregates.

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Definitions:

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