The Fed controls intermediate target variables only indirectly mainly because
A)they are also subject to influence by other parts of the federal government.
B)private-sector decisions also influence these variables.
C)of information lags.
D)of impact lags.

Question

Quizplus · Accepted Answer

The Fed controls intermediate target variables only indirectly mainly because private-sector decisions also influence these variables. The actions of individuals and businesses can impact factors such as interest rates and inflation, which are intermediate targets that the Fed aims to control. Therefore, the Fed can only influence these variables to a certain extent and not completely control them.

The Fed Controls Intermediate Target Variables Only Indirectly Mainly Because