If the Fed chooses M1 as its intermediate target, it will likely choose as its operating target
A)a reserve aggregate.
B)the federal funds rate.
C)M2.
D)either a reserve aggregate or the federal funds rate, depending on whether the economy is in an expansion or a recession.

Question

Quizplus · Accepted Answer

The Fed would choose a reserve aggregate as its operating target if it is targeting M1, as this aligns with controlling the money supply directly through reserves.

If the Fed Chooses M1 as Its Intermediate Target, It