Price stability is often interpreted as a low and stable rate of inflation, and the Federal Reserve has aimed for an inflation rate of around 2 percent, not 3 percent. Congress has not officially set a specific target, but the Federal Reserve's target is generally accepted.

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Price Stability

Question 76

Multiple Choice

Price stability

A) Is defined as a 0 percent rate of inflation in the Full Employment and Balanced Growth Act of 1978.
B) Is targeted at a 3 percent rate of inflation by Alan Greenspan,the head of the Federal Reserve.
C) Has been officially set by Congress at 3 percent or less.
D) Has been achieved consistently in the 20th century in the United States.

Correct Answer: