Use the federal funds rate as its policy instrument

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1. Place the following in sequence, from what the Fed has the most influence on to what the Fed has the least influence on: policy goals, policy tools, policy instruments, intermediate targets.

2. When choosing a policy instrument, the Fed uses the criteria of the instrument being measurable, controllable, and predictable. Which of these criteria has caused the Fed to use the federal funds rate as its policy instrument instead of the level of reserves?

Reference no: EM131303013

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