To determine whether the goal of stable prices is being achieved, the Federal Reserve monitors
A) the core GDP deflator inflation rate.
B) the CPI.
C) the producer price index.
D) the core PCE deflator inflation rate.
E) the GDP price deflator.

Question

Quizplus · Accepted Answer

The Federal Reserve monitors the core PCE deflator inflation rate to determine whether the goal of stable prices is being achieved. This is because the core PCE deflator is considered a more accurate measure of inflation than the CPI or other price indexes, as it reflects changes in prices across all goods and services that households consume.

To Determine Whether the Goal of Stable Prices Is Being