In today's Fed,its primary strategy is to
A)target the federal funds rate in the short-run,target inflation in the long-run.
B)target inflation
C)target the money supply.
D)target the federal funds rate in the short-run,balance inflation and output goals in the long-run.

Question

Quizplus · Accepted Answer

The current primary strategy of the Fed is to target the federal funds rate in the short-run, while also balancing inflation and output goals in the long-run. The Fed uses tools such as open market operations, reserve requirements, and the discount rate to influence the federal funds rate, which is the interest rate at which banks lend to each other overnight. By targeting this rate, the Fed aims to maintain stable prices and promote full employment over the long-term.

In Today's Fed,its Primary Strategy Is to