The Federal Reserve does not target both the money supply and an interest rate because it would be too confusing to Wall Street and would disrupt the financial markets. it would be too easy for Wall Street to determine what policy the Fed is following and this would destabilize the economy. it would be illegal according to the Federal Reserve Act. the Fed cannot achieve a target for both the money supply and an interest rate at the same time.
The Federal Reserve does not target both the money supply and an interest rate because it would be too confusing to Wall Street and would disrupt the financial markets. it would be too easy for Wall Street to determine what policy the Fed is following and this would destabilize the economy. it would be illegal according to the Federal Reserve Act. the Fed cannot achieve a target for both the money supply and an interest rate at the same time.
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter13: The Federal Reserve System
Section: Chapter Questions
Problem 6WNG
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The Federal Reserve does not target both the money supply and an interest rate because
it would be too confusing to Wall Street and would disrupt the financial markets.
it would be too easy for Wall Street to determine what policy the Fed is following and this would destabilize the economy.
it would be illegal according to the Federal Reserve Act.
the Fed cannot achieve a target for both the money supply and an interest rate at the same time.
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