Beginning in 2002, Federal Reserve Policy

question 145

Multiple Choice

Beginning in 2002, Federal Reserve policy

• A) switched its focus from price stability to stimulating real GDP and reducing unemployment.
• B) kept interest rates artificially high, driving housing prices upward.
• C) kept interest rates artificially low, driving housing prices downward.
• D) switched its focus from stimulating real GDP and reducing unemployment to price stability.

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Definitions:

Minimum Required Return

The smallest return on investment that an investor is willing to accept, considering the risk associated with the investment.

Cost Center

A department or segment within a company where costs can be allocated, but that does not directly contribute to profit, primarily used for budgeting and control purposes.

Investment Center

A business unit or division that is responsible for its own revenues, expenses, assets, and returns, and is evaluated on its profitability and efficiency in using its assets.

Profit Center

A department or unit within an organization that is responsible for generating revenue and is evaluated based on its profitability.