During 2003 the Federal Reserve Began to Openly Discuss Deflation

question 85

Multiple Choice

During 2003 the Federal Reserve began to openly discuss deflation. Their comments suggested they

• A)were enthusiastic about the possibility.
• B)were neutral about whether deflation would be a good thing.
• C)knew it was something to watch because of the Japanese experience of the 1990s, but did not alter policy significantly to combat it.
• D)knew it would be a disaster, so they immediately cut the target federal funds rate by 5 percentage points to avoid the possibility.

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Definitions:

Openings

Openings are opportunities or chances that allow for new actions, possibilities, or the initiation of processes in various contexts.

Ethnomethodological Analysis

A method of sociological analysis that examines the ways in which individuals and groups use everyday conversation and gestures to construct a common-sense view of the world.

Applause

A show of approval or appreciation by an audience, typically involving clapping hands.

Statement

A declaration or an assertion made by someone, either spoken or written.