The Fed tries to achieve its policy goals in the macroeconomy by manipulating
A) the currency component of the monetary base almost exclusively.
B) the reserve component of the monetary base almost exclusively.
C) the savings behavior of private citizens.
D) both the currency and reserve components of the monetary base.
E) the rate of influx of foreign currency into the country.

Question

Quizplus · Accepted Answer

The Federal Reserve (Fed) aims to achieve its macroeconomic policy goals by manipulating both the currency and reserve components of the monetary base. This approach allows the Fed to influence the overall money supply and interest rates, thereby affecting economic activity.

The Fed Tries to Achieve Its Policy Goals in the Macroeconomy