The Fed's policy necessarily represents trade-offs among its various goals, which have different levels of relative importance at different times, depending on the state of the economy.

Question

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The Fed's goals, including price stability, maximum employment, and moderate long-term interest rates, often compete with each other and require the Fed to make difficult decisions and trade-offs depending on the current state of the economy.

The Fed's Policy Necessarily Represents Trade-Offs Among Its Various Goals