Price Stability Is Desirable Because

question 40

Multiple Choice

Price stability is desirable because

• A)inflation creates uncertainty,making it difficult to plan for the future.
• B)everyone is better off when prices are stable.
• C)price stability increases the profitability of the Fed.
• D)it guarantees full employment.

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Definitions:

Availability Bias

A cognitive bias that influences decisions based on the immediate examples that come to a person's mind.

Negotiation

A process of discussing issues openly and attempting to reach a joint decision or agreement.

Risk-Averse

The tendency to prefer avoiding losses over achieving equivalent gains.

Risk-Seeking

A behavioral trait of preferring or choosing options that have potentially higher gains albeit with higher risks.