Assume the Fed's target for unemployment is 4% to 5%, and its target for inflation is 2% to 3%. If the inflation rate is 2.1% and the unemployment rate is 10%, the Federal Reserve is likely to lower interest rates.

Question

Quizplus · Accepted Answer

With inflation within the target range but unemployment significantly higher than the target, the Federal Reserve is likely to lower interest rates to stimulate economic growth and reduce unemployment.

Assume the Fed's Target for Unemployment Is 4% to 5