What part of the money pyramid does the Fed have direct control over?
A) the monetary base
B) M1
C) the monetary base plus M1
D) M2

Question

Quizplus · Accepted Answer

The Fed has direct control over the monetary base, which includes currency in circulation and reserves held by banks at the Fed. It indirectly affects other levels of the money pyramid, such as M1 and M2, through its monetary policy actions.

What Part of the Money Pyramid Does the Fed Have