Consider the Desirable Features of Monetary Policy Operating Instruments and the Use

question 111

Essay

Consider the desirable features of monetary policy operating instruments and the use of intermediate targets.What missing feature makes a target intermediate rather than operating? Why did the Fed abandon the use of most intermediate targets?

---

Definitions:

Absolute Advantage

The ability of a country or entity to produce a good or service more efficiently than another country or entity.

Comparative Advantage

The ability of a country, individual, company, or region to produce a good or service at a lower opportunity cost than competitors.

Trade

The process of purchasing, selling, or trading goods and services among individuals, companies, or nations.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, resulting in market balance without excess supply or demand.