Problem
1. Why do you think the Fed currently has a reserve ratio for sight deposits but not for demand deposits?
2. Does the FOMC engage in:
(a) inflation targeting;
(b) money supply targeting;
(c) nominal demand targeting?
Explain your answer in each case. If you think it does none of the above three, what does it do?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.