The Federal Reserve Does Not Target Both the Money Supply

question 155

Multiple Choice

The Federal Reserve does not target both the money supply and an interest rate because

• A)it would be too confusing to Wall Street and would disrupt the financial markets.
• B)it would be too easy for Wall Street to determine what policy the Fed is following and this would destabilize the economy.
• C)it would be illegal according to the Federal Reserve Act.
• D)the Fed cannot achieve a target for both the money supply and an interest rate at the same time.

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Definitions:

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