Which of the following statements about Fed management of the money supply is correct?
A)over the past thirty years,the Fed has always stayed within its pre-announced target rates for growth in M2.
B)the most common tool used by the Fed is a change in the required ratio of reserves to deposits.
C)the rate at which the Fed lends money to banks is called the "Federal Funds rate."
D)the Fed must report each week to Congress on the conduct of monetary policy.
E)none of the above

Question

Quizplus · Accepted Answer

The statements A, B, C, and D are incorrect. The Fed has not always stayed within its target rates for M2 growth, the most common tool is open market operations, the Federal Funds rate is the rate at which banks lend to each other, and the Fed does not report weekly to Congress.

Which of the Following Statements About Fed Management of the Money