The Federal Reserve Operates Under a Rule That Requires Money

question 178

True/False

The Federal Reserve operates under a rule that requires money supply growth by one percentage point for every percentage point that unemployment rises above its natural rate.

---

Definitions:

Drive-Reduction Theory

A theory of motivation stating that behavior is motivated by the desire to reduce internal drives, such as hunger or thirst, that cause physiological discomfort.

Homeostasis

The process by which a stable internal environment is maintained within an organism, regardless of external changes.

Reduce Drives

The psychological concept of decreasing or satisfying basic physiological or psychological needs to reach a state of equilibrium.

Sociological Perspective

An approach to understanding human behavior by placing it within its broader social context, considering how society influences individuals and groups.