In Late 2007, the Fed Began a Series of Cuts

question 83

Multiple Choice

In late 2007, the Fed began a series of cuts in the federal funds rate. Because the core inflation rate was about two percent, the most likely reason for these interest rate cuts was

• A)to reduce the natural unemployment rate.
• B)to increase the real interest rate.
• C)to raise the price of the dollar in the foreign exchange market.
• D)to encourage households to save more money.
• E)to avoid a recession.

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The act of making information about someone or something widely known to the public, typically through the media.

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