If the desired intermediate target is a monetary aggregate,then the preferred operating target will be a(n)________ variable like the ________.
A) interest rate; three-month Treasury bill rate
B) interest rate; federal funds rate
C) reserve aggregate; monetary base
D) reserve aggregate; nonborrowed reserves

Question

Quizplus · Accepted Answer

C) reserve aggregate; monetary base is the correct answer because when the desired intermediate target is a monetary aggregate, central banks prefer to control reserve aggregates, such as the monetary base, to influence the supply of money directly.

If the Desired Intermediate Target Is a Monetary Aggregate,then the Preferred