- CFA Exams
- CFA Level I Exam
- Study Session 5. Economics (2)
- Reading 16. Monetary and Fiscal Policy
- Subject 4. The Objectives of Monetary Policy
CFA Practice Question
If the Fed wants to fight inflation, it should ______
II. raise the federal funds rate target.
III. increase the supply of money.
IV. decrease the supply of money.
I. lower the federal funds rate target.
II. raise the federal funds rate target.
III. increase the supply of money.
IV. decrease the supply of money.
A. II and IV
B. I and IV
C. II and III
Explanation: Raising the federal funds rate target will decrease the supply of money.
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