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)The Fed currently 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 has become more open in recent years.

Question

Quizplus · Accepted Answer

The passage mentions that "the Fed has become more open in recent years" in the context of the publication of policy statements and minutes from monetary policy meetings. This is the only option that is explicitly mentioned in the passage. Option A is incorrect because the passage does not suggest that the Fed seeks absolute certainty in its growth target ranges. Option B is incorrect because the passage does not mention instability in the relationship between aggregates and economic activity as a reason for setting growth target ranges. Option C is incorrect because the passage suggests that the Fed uses M2 as the most important aggregate in policy execution, not M1.

Which of the Following Is True