The Fed's Monetary Policy Strategy Can Be Described as Follows

question 8

Multiple Choice

The Fed's monetary policy strategy can be described as follows:

• A) The Fed uses its policy tools to adjust intermediate targets that directly impact its operating targets in a way that allows the Fed to achieve its goals.
• B) The Fed uses its policy tools to adjust operating targets that directly impact its intermediate targets in a way that allows the Fed to achieve its goals.
• C) The Fed uses its operating targets to adjust its intermediate targets that directly impact its policy tools in a way that allows the Fed to achieve its goals.
• D) None of the above.

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Definitions:

Cancellable

Refers to an agreement or contract that can be terminated or annulled by the involved parties.

Lessor

The entity that rents out a property or asset to another entity, referred to as the lessee.

Sale and Leaseback

A financial transaction where one sells an asset and leases it back for the long-term; thus, continuing to use the asset but no longer owning it.