Which of the following is not necessarily a desirable characteristic of an intermediate target variable?
A)The variable should be a monetary aggregate.
B)The variable should be reliably, and thus predictably, related to the goal variables.
C)Policymakers should be able to observe the intermediate target regularly.
D)The Fed should be able to hit the targeted range of the intermediate variable.

Question

Quizplus · Accepted Answer

While a monetary aggregate may be a desirable intermediate target variable in certain situations, it is not necessarily always the best choice. Other variables such as interest rates or inflation may be more appropriate depending on the economic context. Therefore, A is not necessarily a desirable characteristic of an intermediate target variable.

Which of the Following Is Not Necessarily a Desirable Characteristic