Which of the following statements is an example of the Fed's conditional commitment policy?
A)"In these circumstances,the Committee believes that policy accommodation can be maintained for a considerable period."
B)"The Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time."
C)"Policy accommodation can be removed at a pace that is likely to be measured."
D)"The exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent,and inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal."

Question

Quizplus · Accepted Answer

Choice D outlines the Fed's conditional commitment policy by stating that they will maintain an exceptionally low federal funds rate as long as the unemployment rate remains above 6-1/2 percent and inflation is projected to be no more than a half percentage point above their goal. This is a specific, conditional commitment to their policy actions. Choices A, B, and C are more general statements that do not outline specific conditions or commitments.

Which of the Following Statements Is an Example of the Fed's