A Zero Inflation Rate Is Not the Fed's Objective Because

question 36

Multiple Choice

A zero inflation rate is not the Fed's objective because

• A) that would cause prices to rise
• B) that would cause price to fall
• C) it knows that it cannot attain a zero rate
• D) it believes that the true rate of inflation is lower than what is measured by the Consumer Price Index (CPI)
• E) high rates of inflation may help labor markets adjust more easily

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