If the Fed targets the interest rate, then:
a. the money supply will grow at a more controlled rate

b. monetary policy will reinforce fluctuations in economic activity.
c. the price level will be more stable in the long run.
d. money demand will be more stable.
e. velocity will be less stable.

b

Economics

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The figure above shows the relationship between distance sprinted and recovery time. The curve becomes steeper because as the distance sprinted increases,

A) the extra recovery time needed from sprinting another 100 yards increases. B) the extra recovery time needed from sprinting another 100 yards decreases. C) the recovery time increases. D) the recovery time decreases. E) the relationship between distance sprinted and recovery time becomes more inverse.

Economics

Reserve requirements are changed infrequently because

A. Banks can determine the amount of reserves they wish to hold regardless of the reserve requirement B. Banks cannot usually meet their reserve requirements so the Fed does not monitor it C. Banks set long-term policy decisions, loan decisions, and deposit decisions based on the reserve requirement

Economics