Since the mid-1980s, the FOMC's chief policy focus has been the behavior of
A) the growth rate of the money supply.
B) the federal funds rate.
C) margin requirements on stock purchases.
D) the discount rate.
E) reserve requirements.

Question

Quizplus · Accepted Answer

Since the mid-1980s, the Federal Open Market Committee (FOMC) has primarily focused on the federal funds rate as its chief policy tool for influencing monetary conditions and the economy. The federal funds rate is the interest rate at which depository institutions lend reserve balances to other depository institutions overnight. Adjusting this rate influences other interest rates, economic activity, and inflation.

Since the Mid-1980s, the FOMC's Chief Policy Focus Has Been