Monetarists Think That the Fed Should Use ________ as a Target

question 70

Multiple Choice

Monetarists think that the Fed should use ________ as a target when conducting monetary policy.

• A)the money supply
• B)the federal funds rate
• C)the Treasury bill rate
• D)the inflation rate
• E)the unemployment rate

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Definitions:

Foreign Assets

Financial assets or investments that are located in a country other than the investor's home country.

Open Economy

An economy that engages in international exchange of goods, services, and capital.

National Saving

The total amount saved by the government, households, and the business sector in an economy.

Net Capital Outflow

The difference between the purchase of domestic assets by foreigners and the purchase of foreign assets by domestic residents over a specific period, reflecting the flow of capital out of and into a country.