An article in the New York Times in 1993 stated the following about Fed Chairman Alan Greenspan's decision to no longer announce targets for the money: "Since the late 1970's, the Federal Reserve has made many of its most important decisions by setting a specific target for growth in the money supply .. and often adjusted interest rates to meet them."
Source: Steven Greenhouse, "Fed Abandons Policy Tied to Money Supply," New York Times, July 23, 1993.
If the Fed would no longer have a specific target for the money supply, it would be targeting the
A. savings rate.
B. reserve ratio.
C. discount rate.
D. federal funds rate.
The Fed gave up targeting the money supply because
A. Congress objected to monetary targets.
B. inflation was out of control and so the Fed changed the target.
C. the relationship between interest rates and the money supply was more certain.
D. the relationship between monetary aggregates and other economic variables was becoming unreliable.