If the Fed Were to Allow Unemployment to Remain at a Higher

question 116

Multiple Choice

If the Fed were to allow unemployment to remain at a higher level than NAIRU:

• A)they would maintain price stability.
• B)the dual mandate would be violated.
• C)they would fail to maintain full employment.
• D)All of these statements are true.

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Definitions:

Predict

To make an educated guess about the future based on existing information or trends.

Price and Output Policy

Strategies adopted by firms or the government to determine the prices of goods and services and the level of production to meet economic objectives.

Cartel Members

Firms or countries that coordinate together to control prices and production in an industry, limiting competition.

Incentive to Cheat

Motivations or circumstances that encourage individuals or entities to break rules or agreements for personal gain.