Most economists believe that the best monetary policy target is
A)an interest rate.
B)the money supply.
C)total bank reserves.
D)the discount rate.
E)total liquidity in financial markets.

Question

Quizplus · Accepted Answer

Most economists believe that targeting an interest rate, such as the federal funds rate, is the best way to achieve a desired level of inflation and economic growth. Adjusting interest rates can influence borrowing and spending, which can affect the money supply and liquidity in financial markets. Additionally, targeting specific levels of money supply or bank reserves can be difficult to achieve and may not be as effective in controlling inflation and promoting economic growth.

Most Economists Believe That the Best Monetary Policy Target Is