Article Summary Concerned About Low Inflation,Federal Reserve Bank of Minneapolis President Narayana

question 193

Multiple Choice

Article Summary
Concerned about low inflation,Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said the Fed needed a more aggressive stimulus policy than the setting of near-zero interest rates,and added that negative interest rates could be an effective policy tool.In a September 2015 interview,Kocherlakota stated "Given the inflation outlook,given how low inflation is expected to be,to ensure the credibility of our inflation target,taking a more accommodative stance in September would have been totally justified." While the Federal Open Market Committee chose to hold rates near zero in their September 2015 meeting,Fed Chair Janet Yellen announced that a rate increase would be warranted by the end of the year,and that "negative interest rates was not something that we considered very seriously at all today."
-Refer to the Article Summary.When Fed Chair Janet Yellen announced that a rate increase would be warranted by the end of the year,she was was referring to the

• A)prime rate.
• B)federal funds rate.
• C)long-term real rate of interest.
• D)required reserve rate.

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Definitions:

Supply

The total amount of a product or service available for purchase at any given time.

Demand

The desire and ability of consumers to purchase goods or services at a given price.

Optimal Solution

The most efficient, cost-effective, or productive solution to a problem, typically identified through the use of mathematical models and analysis.

Origins

The location or source where something originates or comes from.