During the last two decades,the Fed has relied more extensively on ___________ in its conduct of monetary policy.(Fill in the blank)
A)the growth rate of the M2 monetary aggregate
B)adjustments in the required reserve ratio
C)control over short-term interest rates
D)the growth rate of the M1 monetary aggregate

Question

Quizplus · Accepted Answer

The Fed has relied more extensively on control over short-term interest rates in its conduct of monetary policy. This is known as the Federal Reserve's interest rate policy or monetary policy approach. The Fed adjusts interest rates to influence borrowing and lending, economic activity, and inflation rates. The growth rate of the M2 or M1 monetary aggregates and changes in the required reserve ratio are also factors that the Fed considers but they are not the primary tool for conducting monetary policy.

During the Last Two Decades,the Fed Has Relied More Extensively