Describe of intermediate target variable of monetary policy.
describe the three criteria that are used to determine whether a particular variable is a worthy candidate to be selected as an intermediate target variable of monetary policy. Now, on the basis of these criteria, evaluate the following as potential intermediate target variables:
a) the 90-day Treasury bill yield
b) the real federal funds rate
c) the real 30-year U.S. government bond yield
d) the non-borrowed monetary base
e) the growth rate of M2
f) excess reserves