Which of the following is true?
A)The Fed sets growth target ranges for several aggregates in order to be absolutely certain they are correct.
B)Since the early 2000s, the Fed no longer sets growth target ranges for the aggregates because of the instability of the relationship between changes in the aggregates and changes in economic activity.
C)The Fed uses M1 primarily in the execution of monetary policy because it is the aggregate most widely used to make transactions.
D)The Fed now sets rigid growth rate rules to limit the degree of discretionary monetary policy.

Question

Quizplus · Accepted Answer

Since the early 2000s, the Fed has not set growth target ranges for the aggregates because of the instability of the relationship between changes in the aggregates and changes in economic activity. Therefore, option B is the correct choice. Option A is incorrect because the Fed does not set growth target ranges for several aggregates. Option C is incorrect because the Fed uses M2 primarily in the execution of monetary policy. Option D is incorrect because the Fed does not set rigid growth rate rules.

Which of the Following Is True