In terms of FOMC directives, the federal funds rate is
A) a short-run operating target.
B) a monetary tool.
C) an intermediate target.
D) a long-term target.
E) part of open market operations.

Question

Quizplus · Accepted Answer

The federal funds rate is a short-run operating target used by the Federal Reserve to achieve its larger goals of stable prices, maximum employment, and moderate long-term interest rates. The FOMC sets a target for the federal funds rate as part of its monetary policy decision-making process.

In Terms of FOMC Directives, the Federal Funds Rate Is