ʺAs the Fed Chases Inflation, Critics Shout, ʹFaster!ʹ

question 3

Multiple Choice

ʺAs the Fed Chases Inflation, Critics Shout, ʹFaster!ʹ
ʺFor weeks, the Fed has broadcast its intention to raise interest rates glacially.ʺ The Fed was moving slowly, according to an economist because ʺ... the declining price of oil, economic fundamentals, including productivity and global competition, will keep inflation in check.ʺ The Fed, recognizing that the economy was improving stated it planned to ʺrespond to changes in economic prospects as needed to fulfill its obligation to maintain price stability.ʺ Other economists disagree with the Fedʹs restrained policy as a ʺmistakeʺ
Www.nytimes, 7/1/2004
The goal of the Fedʹs policy in 2004 was to decrease

• A) the exchange rate
• B) the short-term interest rate
• C) consumption expenditure
• D) the long-term interest rate

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Definitions:

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Relatively Simple Process

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