Monetary policy decisions,such as the target growth rate in the money supply or the target level for interest rates,are set by the
A)president and congress.
B)Federal Reserve Board of Governors.
C)Shadow Open Market Committee.
D)presidents of the Federal Reserve banks.
E)Federal Open Market Committee (FOMC).

Question

Quizplus · Accepted Answer

Monetary policy decisions in the United States are made by the Federal Reserve System, which is an independent central bank. The decision-making body within the Federal Reserve System is the Federal Open Market Committee (FOMC), which consists of the seven members of the Board of Governors and five of the twelve presidents of the Federal Reserve Banks. The FOMC sets targets for the federal funds rate, which is an overnight interest rate that banks charge each other for borrowing funds. The FOMC also sets targets for the growth rate of the money supply and engages in open market operations to achieve these targets. Therefore, choice E, the Federal Open Market Committee (FOMC), is the correct answer.

Monetary Policy Decisions,such as the Target Growth Rate in the Money