Ben Bernanke has suggested that a core inflation rate of ___________is the equivalent of price stability.
A) zero
B) between 1 percent to 2 percent
C) less than 5 percent.
D) less than zero

Question

Quizplus · Accepted Answer

Bernanke suggested that a core inflation rate between 1 percent to 2 percent is the equivalent of price stability. This means that inflation is low enough to avoid distortions in the economy while also allowing for some flexibility in prices. A zero inflation rate is undesirable as it can lead to deflation and a negative inflation rate (less than zero) is even worse as it can signal a collapse in demand and economic activity. A core inflation rate less than 5 percent may still be too high and could indicate inflationary pressures in the economy.

Ben Bernanke Has Suggested That a Core Inflation Rate of ___________Is