Suppose legislation requiring the Fed to keep the inflation rate between 1.5% and 2.5% per year is passed by Congress.This law restricts the Fed's

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The legislation restricts the Fed's goal independence. Goal independence refers to the ability of the Fed to set their own goals and targets without external influence. With the new law in place, the Fed must aim to keep inflation between 1.5% and 2.5%, thereby restricting their goal independence. However, the law does not restrict their instrument independence, which refers to their ability to choose the tools and methods to achieve their goals.

Suppose Legislation Requiring the Fed to Keep the Inflation Rate