Which of the following criteria must be satisfied when selecting an intermediate target?
A) The variable must be measurable and frequently available.
B) The variable must be controllable with the use of the central bank's policy tools.
C) The variable must have a predictable impact on the policy goal.
D) Each of the above.

Question

Quizplus · Accepted Answer

All three criteria must be satisfied when selecting an intermediate target. The variable must be measurable and frequently available so that it can be monitored and adjusted as needed. The variable must also be controllable with the use of the central bank's policy tools, as otherwise the bank will not be able to achieve its targets. Finally, the variable must have a predictable impact on the policy goal, which is essential for the central bank to effectively guide the economy towards its goals.

Which of the Following Criteria Must Be Satisfied When Selecting