When the Federal Open Market Committee meets it
A)looks only at the state of economy to determine how to conduct monetary operations in order to follow the monetary policy rule set by law.
B)looks at the state of the economy and economic forecasts to determine how to conduct monetary operations in order to follow the monetary policy rule set by law.
C)looks only at the state of the economy to determine the target it will set for the federal funds rate.
D)looks at the state of the economy and economic forecasts to determine the target it will set for the federal funds rate.

Question

Quizplus · Accepted Answer

The Federal Open Market Committee (FOMC) looks at the state of the economy and economic forecasts to determine the target it will set for the federal funds rate. This is because the FOMC's goal is to use monetary policy to achieve its dual mandate of maximum employment and price stability. To do this, the FOMC takes into consideration a wide array of economic data to assess the current state of the economy and make informed decisions on how to conduct monetary operations, including setting the federal funds rate target.

When the Federal Open Market Committee Meets It