Suppose the Fed's Primary Goal Is Price Stability and It

question 93

Multiple Choice

Suppose the Fed's primary goal is price stability and it aims to keep the inflation rate at 2%. If the inflation rate rose above 2%, what should it do?

• A) pursue an expansionary monetary policy
• B) pursue a contractionary monetary policy
• C) reduce the required reserve ratio
• D) impose a temporary ceiling on the federal funds rate

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Definitions:

Conversational Analyses

A method for studying the construction and patterns of social interaction within natural conversation.

Applause

The expression of approval or admiration for someone or something through clapping.

Ethnomethodological

Relates to a sociological method that studies the ways people make sense of their everyday lives.

Conversational Analysis

A methodology in sociolinguistics and sociology that studies the structure and patterns of conversation to understand social interactions.