Large fluctuations in money supply growth and smaller fluctuations in the federal funds rate between October 1982 and the early 1990s indicate that the Fed had shifted to ________ as an operating target.

Question

Quizplus · Accepted Answer

The Federal Reserve shifted to using borrowed reserves as an operating target during this period. This approach allowed for more flexibility in managing the money supply and interest rates, leading to the observed large fluctuations in money supply growth and smaller fluctuations in the federal funds rate.

Large Fluctuations in Money Supply Growth and Smaller Fluctuations in the Federal