Sometimes the Fed faces conflicting goals and it must emphasize one goal over another. Which of these is a goal of the Fed that might conflict with its goal of full employment?
A) promoting economic growth
B) promoting an equitable distribution of income
C) keeping the price level stable
D) keeping tax rates low

Question

Quizplus · Accepted Answer

The Fed's goal of keeping the price level stable (controlling inflation) can conflict with its goal of full employment. Tightening monetary policy to control inflation can slow economic growth and increase unemployment.

Sometimes the Fed Faces Conflicting Goals and It Must Emphasize