Which of the Following Statements Is an Example of the Fed's

question 73

Multiple Choice

Which of the following statements is an example of the Fed's conditional commitment policy?

• A)"In these circumstances,the Committee believes that policy accommodation can be maintained for a considerable period."
• B)"The Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time."
• C)"Policy accommodation can be removed at a pace that is likely to be measured."
• D)"The exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent,and inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal."

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Definitions:

Market System

A system where economic decisions and the pricing of goods and services are guided purely by the interactions of a country's individual citizens and businesses.

Centrally Planned System

An economic system in which decisions about production and distribution are made by a centralized authority rather than by market forces.

Free-Market System

An economic system based on supply and demand with minimal governmental control, where prices are determined by the interactions between consumers and businesses.

Marxist Economy

An economic system based on the socio-economic theories of Karl Marx, focusing on the role of labor in the development of an economy and the concept of class struggle.