Since the early 1990s,the Fed has conducted monetary policy by setting a target for the
A)level of borrowed reserves.
B)monetary base.
C)federal funds rate.
D)inflation rate.

Question

Quizplus · Accepted Answer

The Federal Reserve (Fed) sets a target for the federal funds rate, which is the interest rate at which depository institutions lend reserve balances to each other on an overnight basis. By adjusting the federal funds rate target, the Fed influences the overall stance of monetary policy and aims to achieve its dual mandate of price stability and maximum employment. Since the early 1990s, the Fed has conducted monetary policy by using open market operations and other tools to keep the federal funds rate in line with its target.

Since the Early 1990s,the Fed Has Conducted Monetary Policy by Setting