If the Fed sets a target rate of inflation below 4%,it is an example of the Fed using:
A) a monetary policy rule.
B) discretion.
C) unofficial influence.
D) the bully pulpit.

Question

Quizplus · Accepted Answer

When the Fed sets a target rate of inflation, it is following a specific rule for making monetary policy decisions. This rule guides the Fed's actions and is based on economic data and analysis. By establishing a target rate of inflation, the Fed is signaling its commitment to maintaining stable prices and promoting economic growth. This is an example of a monetary policy rule, which gives the Fed a clear framework for making policy decisions.

If the Fed Sets a Target Rate of Inflation Below