Suppose that the Federal Reserve Open Market Committee adheres to the ideas expressed by ________.If the economy moves into a recession,the Fed would recommend that the federal funds target rate decrease as long as the inflation rate did not rise above the publicly announced goal for inflation.
A)the gold standard
B)the monetarist school of thought
C)inflation targeting
D)the Taylor Rule

Question

Quizplus · Accepted Answer

The statement reflects the core principle of inflation targeting, where the central bank sets a publicly announced target for inflation and adjusts the monetary policy to maintain it. In a recession, if inflation is under control, then the Fed would lower the interest rates to stimulate the economy. The other choices such as the gold standard, monetarist school of thought, and the Taylor Rule do not address the specific scenario mentioned in the question.

Suppose That the Federal Reserve Open Market Committee Adheres to the Ideas