Which of the Following Statements Is Not Correct

question 28

Multiple Choice

Which of the following statements is not correct?

• A)The current target of the FOMC is the federal funds rate
• B)If the Fed were to target the quantity of reserves, a decrease in reserve demand would result in a lower federal funds rate
• C)The Fed currently sets both an interest rate and a quantity target for monetary policy
• D)If the Fed were to target the quantity of reserves, an increase in reserve demand would raise the federal funds rate

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