The U.S. experience during the 1980s and 1990s illustrates that
A) fiscal policy is substantially more potent than monetary policy.
B) a balanced budget is essential for the achievement of price stability.
C) a monetary policy that keeps the inflation rate low and steady will help promote economic stability.
D) there is a trade-off between inflation and unemployment-the unemployment rate can be reduced if we are willing to tolerate higher rates of inflation.

Question

Quizplus · Accepted Answer

The U.S. experience during the 1980s and 1990s showed that a monetary policy that keeps the inflation rate low and steady can help promote economic stability. This period saw the implementation of inflation targeting and a focus on maintaining low and stable inflation, which helped reduce uncertainty and promote economic growth. This suggests that monetary policy is an effective tool for promoting economic stability.

The US Experience During the 1980s and 1990s Illustrates That