Which statement(s) is(are) true? I. The Fed is required to promote economic growth accompanied by full employment, stable prices, and moderate long-term interest rates.
II) To fight high unemployment, the Fed must stimulate the economy. If the stimulus leads to inflation, the goal of promoting full employment conflicts with the goal of price stability.
III) The Fed may have to stimulate the economy to promote economic growth, which can lead to inflation. If the Fed is fighting inflation, it may have to raise interest rates, which conflicts with the goal of moderate long-term interest rates.
A) I only
B) II and III only
C) I and III only
D) I, II, and III

Question

Quizplus · Accepted Answer

All statements are true. The Fed's dual mandate includes promoting maximum employment and stable prices, which can sometimes conflict. Stimulating the economy can lead to inflation, and fighting inflation can involve raising interest rates, conflicting with moderate long-term interest rates.

Which Statement(s) Is(are) True? I