Which of the following is an operating target?
A) M1
B) M2
C) nonborrowed reserves
D) the inflation rate

Question

Quizplus · Accepted Answer

Nonborrowed reserves are an operating target because they are directly controlled by the central bank through its open market operations. M1 and M2 are monetary aggregates that may be used as intermediate targets, but they are not directly controlled by the central bank. The inflation rate is a long-term goal or ultimate target, but it cannot be directly controlled by the central bank in the short run.

Which of the Following Is an Operating Target