Suppose that inflation were 2 percent and unemployment were 4 percent.Which of the elements of the Fed's dual mandate would it be failing?

Question

Quizplus · Accepted Answer

Neither of the elements of the Fed's dual mandate would be failing in this scenario. The 2 percent inflation rate falls within the Fed's target range for price stability and the 4 percent unemployment rate indicates relatively strong employment.

Suppose That Inflation Were 2 Percent and Unemployment Were 4