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When We Raise the Federal Funds Rate by 2 Percent

Question 1

Multiple Choice

When we raise the federal funds rate by 2 percent for every 1 percent increase in the inflation rate, this is an example of:


A) a fiscal policy rule.
B) a monetary policy rule.
C) discretionary monetary policy.
D) discretionary fiscal policy.
E) None of these answers is correct.

Correct Answer:

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