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Assume That the Federal Reserve Replaces the Money Stock with the Interest

Question 47

Multiple Choice

Assume that the Federal Reserve replaces the money stock with the interest rate as an intermediate target.Then,


A) the range for the target interest rate would be chosen to hit the inflation rate,unemployment rate,and growth rate of the economy.
B) if the Treasury bill rate fell temporarily below the target range,the Open Market Desk would sell securities in the open market until the Treasury bill rate rose to the target range.
C) if the Treasury bill rate rose above the target range,the Open Market Desk would purchase Treasury bills or other government securities.
D) All of the above

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