Which of the following might the Fed rely on as an intermediate target?
A)The monetary base
B)The discount rate
C)M2
D)The exchange rate of the dollar

Question

Quizplus · Accepted Answer

The Fed has historically targeted M2 (a measure of the money supply that includes cash, checking deposits, savings deposits, and other assets) as an intermediate target to achieve its goals of price stability and full employment. The other options listed (monetary base, discount rate, and exchange rate of the dollar) are tools or indicators used by the Fed, but not typically used as intermediate targets.

Which of the Following Might the Fed Rely on as an Intermediate