Asked by
Christine Thige
on Nov 16, 2024Verified
Monetary policy
A) must be described in terms of interest-rate targets.
B) must be described in terms of money-supply targets.
C) can be described either in terms of the money supply or in terms of the interest rate.
D) cannot be accurately described in terms of the interest rate or in terms of the money supply.
Monetary Policy
Economic policy tools used by a central bank to control the supply of money, aiming to achieve macroeconomic objectives like controlling inflation, consumption, growth, and liquidity.
Interest-Rate Targets
The specific interest rates that central banks aim for in their monetary policy operations to influence economic conditions.
Money-Supply Targets
Economic policy goals that aim to control the amount of money available in the economy to ensure stability or encourage growth.
- Understand the Federal Reserve's responsibility in defining goals for monetary policy.
Verified Answer
DP
Learning Objectives
- Understand the Federal Reserve's responsibility in defining goals for monetary policy.