To determine whether the goal of stable prices is being achieved, the Federal Reserve monitors the ________ but uses as its operational guide the ________.
A) core CPI; core inflation rate
B) core inflation rate; CPI inflation rate
C) CPI; core inflation rate
D) GDP price deflator; CPI

Question

Quizplus · Accepted Answer

The Federal Reserve monitors the Consumer Price Index (CPI) to assess price stability but uses the core inflation rate, which excludes volatile food and energy prices, as its operational guide to make more informed policy decisions.

To Determine Whether the Goal of Stable Prices Is Being