The Fed's use of the ________ as an operating target in the 1970s resulted in ________ monetary policy.
A)federal funds rate;countercyclical
B)federal funds rate;procyclical
C)M1 money supply;countercyclical
D)M1 money supply;procyclical

Question

Quizplus · Accepted Answer

The Fed's use of the federal funds rate as an operating target in the 1970s resulted in procyclical monetary policy, meaning that the Fed would adjust interest rates in a way that amplified the business cycle rather than smoothing it out.

The Fed's Use of the ________ as an Operating Target