"As the Fed Chases Inflation, Critics Shout, 'Faster!'" "For weeks, the Fed has broadcast its intention to raise interest rates glacially." The Fed was moving slowly, according to an economist because "...the declining price of oil, economic fundamentals, including productivity and global competition, will keep inflation in check." The Fed, recognizing that the economy was improving stated it planned to "respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability." Other economists disagree with the Fed's restrained policy as a "mistake."
Www)nytimes, 7/1/2004
The goal of the Fed's policy in 2004 was to decrease
A) the exchange rate
B) consumption expenditure
C) the long-term interest rate
D) the short-term interest rate

Question

Quizplus · Accepted Answer

The Fed's policy aimed to decrease consumption expenditure by raising interest rates, which would make borrowing more expensive and thus reduce spending.

"As the Fed Chases Inflation, Critics Shout, 'Faster!'" "For Weeks