Fed policies since the mid-1980s have been intended to
A)steepen the growth path of natural real GDP.
B)taper down the growth rate of actual real GDP as it approaches natural real GDP.
C)accelerate the growth rate of natural real GDP whenever actual real GDP exceeds it.
D)use the "runway" of natural real GDP as a springboard to faster growth.

Question

Quizplus · Accepted Answer

Fed policies, particularly those related to monetary policy, aim to stabilize the economy by adjusting interest rates and controlling inflation. One of their goals is to moderate the growth rate of actual real GDP to align it more closely with the potential or natural level of GDP, thereby avoiding overheating the economy or causing inflation to rise uncontrollably. This approach helps in maintaining sustainable economic growth over time.

Fed Policies Since the Mid-1980s Have Been Intended to