Why Has the Fed Made Low Inflation a Major Goal

question 86

Multiple Choice

Why has the Fed made low inflation a major goal in recent decades?

• A)Because high inflation rates reduce the tax revenues collected by the federal government
• B)Because they wish to avoid the rapid and sustained price increases that occurred during the 1970s
• C)Because Congress passed a law in 1981 mandating the Fed to reduce the inflation rate to 2%
• D)Because high inflation rates increase the value of the dollar and make U.S. goods less competitive in foreign markets

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