In guiding policy in recent years, the Fed has
A)moved almost completely away from both aggregates and the interest rate as targets.
B)increased the use of both the aggregates and the interest rate as targets.
C)used the aggregates more than the interest rate as targets.
D)used interest-rate targeting more than monetary-aggregate targeting.

Question

Quizplus · Accepted Answer

In recent years, the Fed has primarily used interest-rate targeting as its main policy tool, rather than targeting monetary aggregates such as M2 or the federal funds rate. This was especially evident during the years of quantitative easing, where the Fed's main goal was to lower long-term interest rates by purchasing large quantities of assets, rather than targeting a specific monetary aggregate.

In Guiding Policy in Recent Years, the Fed Has