During World War II,the Fed in effect relinquished its control of monetary policy through its policy of
A)continually lowering reserve requirements.
B)continually raising reserve requirements.
C)pegging interest rates.
D)targeting free reserves.

Question

Quizplus · Accepted Answer

The Fed pegged interest rates during World War II, which means it set a target rate for interest rates and used open market operations to manipulate the money supply and keep interest rates at that target level. This effectively relinquished the Fed's control of monetary policy, as they were focused on maintaining the target rate instead of adjusting policy to meet economic needs.

During World War II,the Fed in Effect Relinquished Its Control