Price Level Stability

question 29

Multiple Choice

Price level stability

• A) has no relationship to growth in potential GDP.
• B) is thought by most economists to be reached with a measured inflation rate of between 0 and 2 percent a year.
• C) is the most important tool of the Federal Reserve.
• D) was attained by the Fed for the period between 1979 and 2001.

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Definitions:

Consideration

The value (such as money, service, or goods) that is exchanged between parties in a contract, making the agreement legally binding.

Value

The importance, worth, or usefulness of something, often in terms of money, social benefits, or personal significance.

Shelter Principle

A legal rule in negotiable instruments law that allows a person who obtains a negotiable instrument under certain conditions to acquire greater rights than the transferor had.

Holder-In-Due-Course Status

is a legal status that protects a purchaser of debt when they acquire it for value, in good faith, and without notice of certain adverse claims or potential defenses.