Forward guidance occurs when the Federal Reserve:
A)provides information about the future course of monetary policy in order to influence expectations about future interest rates.
B)follows the same future course of monetary policy that it has been following in the past.
C)carries out open market operations to influence future interest rates.
D)provides information about current monetary policy in order to influence expectations about future interest rates.

Question

Quizplus · Accepted Answer

Forward guidance occurs when the Federal Reserve provides information to the public about the future course of monetary policy. The aim is to influence expectations about future interest rates so that individuals and businesses can make better-informed financial decisions. This can help to promote economic stability and growth.

Forward Guidance Occurs When the Federal Reserve