Sometimes the Fed Faces Conflicting Goals and It Must Emphasize

question 216

Multiple Choice

Sometimes the Fed faces conflicting goals and it must emphasize one goal over another. Which of these is a goal of the Fed that might conflict with its goal of full employment?

• A) promoting economic growth
• B) promoting an equitable distribution of income
• C) keeping the price level stable
• D) keeping tax rates low

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Definitions:

Minimum Wage

The lowest legal hourly pay rate that employers can pay their workers, which is set by government law.

Price of Soybeans

The current market value at which soybeans can be bought or sold.

Normative Statement

Assertions or opinions that express what ought to be, involving value judgments and cannot be tested or verified.

Positive Statement

An objective statement based on factual information that can be tested and validated, often used in economics to describe what is happening without judgment of desirability.