If the Fed Follows a Policy of Targeting the Inflation

question 23

Multiple Choice

If the Fed follows a policy of targeting the inflation rate:

• A) its credibility will be lowered.
• B) the automatic stabilizers will not work.
• C) the natural rate of unemployment will rise.
• D) it will likely face fewer political pressures.

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Definitions:

Polygamist

An individual who is married to more than one spouse at the same time, a practice allowed in some cultures and religions but illegal in many countries.

White Settlers

Individuals of European descent who settled in lands outside Europe, often displacing indigenous populations, during periods of exploration and colonial expansion.

Indian Tribes

Indigenous peoples of the Americas, organized into societies or communities sharing common territories, customs, and cultural traits.

Peace Policy

An approach by governments or organizations towards achieving peace and resolving conflicts through diplomacy, negotiation, and nonviolent means.