The Fed's monetary policy is commonly intended to alter the supply of funds in the banking system in order to achieve a specific targeted
A)discount rate.
B)required reserve requirement.
C)federal funds rate.
D)prime rate.

Question

Quizplus · Accepted Answer

The Federal Reserve's monetary policy primarily aims to influence the federal funds rate, which is the interest rate at which depository institutions lend reserve balances to other depository institutions overnight. This rate is a key tool for managing the supply of funds in the banking system to achieve broader economic objectives.

The Fed's Monetary Policy Is Commonly Intended to Alter the Supply