Currently the Fed targets
A) both the monetary base and the federal funds rate simultaneously.
B) the exchange rate.
C) the inflation rate
D) the federal funds rate.
E) the price level.

Question

Quizplus · Accepted Answer

The Federal Reserve targets the federal funds rate, which is the interest rate at which banks lend reserve balances to other banks overnight. By adjusting the federal funds rate, the Fed can influence borrowing and lending in the economy, which in turn affects spending, investment, and inflation.

Currently the Fed Targets