Over the past 40 years,the most frequent target for the Fed's monetary policy has been the:
A)prime interest rate.
B)federal funds rate.
C)M1 money supply.
D)M2 money supply.
E)required reserve ratio.

Question

Quizplus · Accepted Answer

The Federal Reserve's most frequent target for monetary policy over the past 40 years has been the federal funds rate, which is the rate at which banks lend their excess reserves to each other overnight. The Fed sets a target rate for the federal funds rate and uses various tools to influence the market rate to move towards the target rate, in order to achieve its monetary policy goals of price stability and maximum employment.

Over the Past 40 Years,the Most Frequent Target for the Fed's