Which of the following is true?
A)The Fed's new openness has led to more direct control over the fed funds rate and a smaller volume of open market operation necessary to hit the targeted fed funds rate.
B)Expectations of market participants cause the fed funds rate to move in the desired direction before the Fed even intervenes.
C)With the new Fed openness, time lags in the monetary policy process have been reduced.
D)All of the above are true.

Question

Quizplus · Accepted Answer

The Fed's increased transparency and communication strategies have indeed led to more efficient control over the fed funds rate, with expectations of market participants often moving the rate in the desired direction even before the Fed intervenes. This has also contributed to reducing time lags in the monetary policy process, making all the statements true.

Which of the Following Is True