In 2012, the Fed

question 10

Multiple Choice

In 2012, the Fed

• A) adopted a strict monetary rule of 2 percent per year.
• B) adopted inflation targeting, setting a target rate of 2 percent per year.
• C) relaxed all monetary rules and targets in favor of a fully flexible monetary policy.
• D) adopted a nominal GDP growth rate target of 6 percent per year.

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Definitions:

Product Mix

The total range of products or services offered by a company to its customers.

Increasing-Cost Industry

An industry in which the costs of production increase as the industry grows and decreases as it contracts.

Resource Prices

The costs associated with acquiring inputs used in the production process, such as labor, materials, and capital.

Industry Expands

The process of growth within a particular sector or industry, marked by increased production, innovation, and possibly the entrance of new firms.