The Federal Reserve targets

A.

long-term interestrates, such as the rate in the market at which banks lend to commercialcustomers, the prime rate.

B.

short-term interestrates, such as the rate in the market at which banks trade reservesovernight, the federal funds rate.

C.

short-term interestrates, such as the rate in the market at which banks lend to commercialcustomers, the prime rate.

D.

long-term interest rates such as the rate in the market at which banks borrow from theFed, the federal funds rate.