Some Economists Are Concerned That by Holding Its Target for the Federal

question 61

Multiple Choice

Some economists are concerned that by holding its target for the federal funds rate close to zero for three years,the Fed's policy is actually

• A) causing inflation to increase.
• B) causing unemployment to increase.
• C) increasing the unemployment rate while lowering the natural rate of unemployment.
• D) creating deflation.

---

Definitions:

AVC Curves

Average Variable Cost curves, which illustrate the variable costs per unit of output produced, typically downward sloping, reflecting economies of scale.

ATC Curves

Graphs that represent the average total cost of production at different levels of output in economics.

Competitive Industry

An industry characterized by multiple firms competing with each other by offering similar products or services, aiming to attract consumers and gain market share.

Perfect Competition

A market structure characterized by a complete absence of rivalry among the sellers and perfect information among buyers and sellers.