The Fed has traditionally been willing to sacrifice interest rate stability in order to achieve low levels of inflation.

Question

Quizplus · Accepted Answer

The Fed's dual mandate is to promote maximum employment and price stability. While interest rate stability is important, the Fed has historically been willing to adjust interest rates in order to achieve its inflation target. This is because allowing inflation to persist at high levels can lead to long-term economic instability and harm to the overall economy.

The Fed Has Traditionally Been Willing to Sacrifice Interest Rate