If the Inflation Rate Is Equal to the Target Inflation

question 61

Multiple Choice

If the inflation rate is equal to the target inflation rate, then the Fed

• A)does not have to change monetary policy as long as the rate of inflation remains constant.
• B)will only change monetary policy if it wants to change the target inflation rate.
• C)will change monetary policy if it feels that aggregate demand is too high or low.
• D)does not have to worry about changing monetary policy.
• E)will change monetary policy only if it believes that potential GDP is changing.

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Definitions:

Intonation

The rise and fall in the pitch of the voice in speech, affecting the meaning of the words conveyed.

Facial Expression

The movement of facial muscles to convey emotions or reactions, often communicating nonverbally with others.

Passive-Voice Sentences

Sentences where the subject is the recipient of the action, emphasizing the action or the object of the action rather than the actor.

English-Speaking Children

Children who use English as their primary language for communication, often residing in or culturally connected to English-speaking countries.