The Following Passage Is the Opening Paragraph from the April

question 89

Multiple Choice

The following passage is the opening paragraph from the April 13, 2016 Beige Book: Reports from the twelve Federal Reserve Districts suggest that national economic activity continued to expand in late February and March, though the pace of growth varied across Districts. Most Districts said that economic growth was in the modest to moderate range and that contacts expected growth would remain in that range going forward. Consumer spending increased modestly in most Districts and reports on tourism were mostly positive. Labor market conditions continued to strengthen and business spending generally expanded across most Districts. Demand for nonfinancial services grew moderately overall. Manufacturing activity increased in most Districts. Construction and real estate activity also expanded. Credit conditions improved, on net, in most Districts. Low prices weighed on energy and mining output as well as prospects for agricultural producers. Overall, prices increased modestly across the majority of Districts, and input cost pressures continued to ease.
From the passage, you might expect that the Fed would have given priority to

• A) the promotion of economic growth.
• B) maintaining full employment.
• C) stable prices.
• D) moderate long-term interest rates.

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Definitions:

Progesterone

A steroid hormone released by the corpus luteum that stimulates the uterus to prepare for pregnancy.

Estrogen

A group of steroid hormones that promote the development and maintenance of female characteristics of the body.

Feedback Loops

Mechanisms that use the outcomes of processes to regulate and control the processes themselves, often maintaining stability in systems.

Female Hormones

Chemical substances, such as estrogen and progesterone, produced mainly by the ovaries that regulate female reproductive functions and secondary sex characteristics.