If the Fed Were to Focus Only on Inflation

question 112

Multiple Choice

If the Fed were to focus only on inflation:

• A) its capacity to fight recessions would be diminished.
• B) the private sector would become less responsive to the Fed's policies.
• C) its independence from political pressures would decrease.
• D) its credibility would be reduced.

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Definitions:

Cash

Money or any instrument that banks will accept for deposit and immediate credit to a company’s account, such as a check, money order, or bank draft.

Common Stock Account

An equity account on a company's balance sheet representing the amount of money that has been invested directly in the company by its shareholders in exchange for common stock.

$5 Par Value

A nominal or face value assigned to a share of stock, in this case, set at five dollars, used in certain financial calculations and legal paperwork.

$18 Per Share

A specific price value assigned to individual shares of stock, indicating the cost or value of a single share at a particular moment.