Which of the following is most likely to be an ultimate target for monetary policy?
A) short term interest rates
B) reserve ratios
C) the inflation rate
D) exchange rates
E) stock market indexes, such as the S&P 500

Question

Quizplus · Accepted Answer

The inflation rate is the most likely ultimate target for monetary policy, as central banks aim to maintain stable prices in the economy. Controlling inflation via monetary policy tools, such as adjusting interest rates and the money supply, is a key mandate for most central banks. Short term interest rates, reserve ratios, exchange rates, and stock market indexes may be influenced by monetary policy, but they are not the ultimate targets.

Which of the Following Is Most Likely to Be an Ultimate