Achieving the goal of "moderate long-term interest rates" means that the Fed needs to keep
A) long-term nominal interest rates close to short-term nominal interest rates.
B) long-term nominal interest rates close to short-term real interest rates.
C) long-term nominal interest rates close to long-term real interest rates.
D) long-term real interest rates close to short-term real interest rates.

Question

Quizplus · Accepted Answer

Achieving the goal of "moderate long-term interest rates" involves the Federal Reserve aiming to keep long-term nominal interest rates close to long-term real interest rates. This means adjusting monetary policy to ensure that inflation expectations are stable, thereby maintaining the purchasing power of money over time and supporting economic growth.

Achieving the Goal of "Moderate Long-Term Interest Rates" Means That