Fed policy since the early 1990s indicates that it is pursuing a policy of targeting the
A)monetary base.
B)money supply.
C)federal funds interest rate.
D)exchange rate.

Question

Quizplus · Accepted Answer

Fed policy since the early 1990s has primarily focused on targeting the federal funds interest rate. This is done through open market operations and adjusting the target range for this rate to influence short-term interest rates and keep them in line with the Fed's goals for inflation and employment. While the Fed also takes into account factors like the money supply and exchange rates, the federal funds rate is the primary target of its policy.

Fed Policy Since the Early 1990s Indicates That It Is