Which of the following statements is most correct?

Question

Quizplus · Accepted Answer

The target federal funds rate is a range set by the Federal Reserve, while the market federal funds rate is the actual rate at which banks lend or borrow overnight funds. The market federal funds rate can deviate from the target rate due to market forces or changes in liquidity conditions. Option B states that over the last 10 years, the deviations between the target and market federal funds rate have decreased, which suggests that the Federal Reserve has been successful in its monetary policy implementation. Option A is incorrect because there can be deviations between the target and market rates. Option C is incorrect because it suggests that the Federal Reserve has been unsuccessful in its monetary policy implementation. Option D is incorrect because there is a clear relationship between the target and market federal funds rate.

Which of the Following Statements Is Most Correct