If the Fed Reduces the Inflation Rate from 5% to 3

question 140

Multiple Choice

If the Fed reduces the inflation rate from 5% to 3%, it is:

• A) following a policy rule.
• B) engaging in disinflation.
• C) increasing employment.
• D) raising economic growth.

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Definitions:

Hydrobromic Acid

A strong acid formed by dissolving the diatomic molecule hydrogen bromide (HBr) in water.

Strong Acid

An acid that completely dissociates into its ions in water, releasing all of its hydrogen atoms as hydrogen ions.

Acidity

A measure of the ability of a solution to donate hydrogen ions (H+) and thereby lower its pH.