If the Inflation Rate in the Economy Were to Fall

question 64

Multiple Choice

If the inflation rate in the economy were to fall by 2% below the target inflation rate, the target federal funds rate would:

• A)Decrease by 3.0%.
• B)Remain at 2.5%.
• C)Decrease by 1.0%.
• D)Increase by 1.0%.

---

Definitions:

Quarterly Sales

The total revenue or number of sales transactions made by a company during a three-month period, often used to track business performance.

Motorcycle Dealership

A business that specializes in selling motorcycles, often including related services such as maintenance and financing options.

Seasonal Indexes

Numerical values used to adjust data for the effect of seasonality, helping to understand patterns within specific time periods.

Natural Gas Consumption

Natural gas consumption refers to the quantity of natural gas used over a specified time period by a household, business, or country.