Using an interest rate for an intermediate target
A)will cause the quantity of money to fluctuate.
B)will often lead to a recession.
C)requires the use of a monetary aggregate as an operating target.
D)is required by the Federal Reserve Act.

Question

Quizplus · Accepted Answer

Using an interest rate as an intermediate target allows the central bank to adjust the money supply as needed to maintain the target interest rate, which can cause the quantity of money in the economy to fluctuate.

Using an Interest Rate for an Intermediate Target