Under Alan Greenspan,the Fed:
A) Targeted interest rates only.
B) Targeted the money supply only.
C) Targeted the unemployment level.
D) Used a mix of money-supply and interest-rate adjustments.

Question

Quizplus · Accepted Answer

Under Alan Greenspan, the Fed used a mix of money-supply and interest-rate adjustments. Greenspan's approach, known as "constrained discretion," relied on both the money supply and interest rates as levers to achieve the Fed's dual mandate of price stability and full employment. The Fed would adjust the money supply to affect interest rates, but also used interest rate policies to affect economic activity.