Using a Monetary Aggregate for an Intermediate Target

question 22

Multiple Choice

Using a monetary aggregate for an intermediate target

• A)will cause the inflation rate to accelerate.
• B)will cause interest rates to fluctuate.
• C)requires the use of an interest rate as an operating target.
• D)is required by the Federal Reserve Act.

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Definitions:

Interest Earned

The amount of money gained as interest from savings, investments, or loans, over a specific period.

Account

A record or statement showing the financial transactions and status of an individual or entity with a financial institution.

Days

Units of time equal to 24 hours, used as a measurement of the duration of events or the interval between them.

Term Deposit

A bank deposit with a fixed term and usually a higher interest rate than a savings account, requiring funds to remain deposited for a specific period.