The operational goals the Fed uses for its monetary policy objectives are
A)the core inflation rate and the output gap.
B)the supply of reserves and the output gap.
C)the federal funds rate and the core inflation rate.
D)the federal funds rate and the supply of reserves.
E)the demand for reserves and the supply of reserves.

Question

Quizplus · Accepted Answer

The Fed uses the core inflation rate and the output gap as its operational goals for monetary policy objectives. The core inflation rate is the rate of change in the prices of goods and services excluding food and energy, and the output gap is the difference between actual output and potential output.

The Operational Goals the Fed Uses for Its Monetary Policy