The Federal Open Market Committee
A)must submit its policies to the President and Senate for approval.
B)operates with almost complete discretion over monetary policy.
C)is required to target short-term interest rates in a mechanical way based on an equation that takes into account both price stability and output fluctuations.
D)is required to set and publicize targets for money supply growth.

Question

Quizplus · Accepted Answer

The Federal Open Market Committee (FOMC) operates with almost complete discretion over monetary policy. While it does take into account various economic factors such as price stability and output fluctuations, it is not required to target short-term interest rates in a mechanical way or set specific targets for money supply growth. However, it must report regularly to Congress on its actions and explain the reasoning behind its decisions.