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


Answer: C

Economics

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If unemployment is below the natural rate, GDP is below potential output

a. True b. False

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Assume that all commercial banks are loaned up. Total deposits in the banking system are $200 million. The required reserve ratio is increased. The money supply will

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