What is the only policy instrument the Fed really can control directly and precisely?
A)short-term interest rates
B)the money supply
C)high-powered money
D)corporate tax rates

Question

Quizplus · Accepted Answer

The Federal Reserve directly and precisely controls high-powered money, also known as the monetary base, which includes currency in circulation and reserves held at the Fed. This control is exercised through open market operations and other monetary policy tools.

What Is the Only Policy Instrument the Fed Really Can