The Fed's first forward guidance in 2009 was framed in terms of keeping interest rates low
A. for an extended period.
B. at least until a particular date in the future.
C. based on outcomes for the unemployment rate and inflation rate.
D. until the next Presidential election.
Answer: A
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For private consumption goods, the optimal number of users is determined by the unanimity rule
a. True b. False
Mouthwash is sold in 24 oz bottles for $2.40 and in 12 oz. bottles for $1.20. This represents
A) price differentiation. B) price discrimination. C) marginal cost pricing. D) None of the above.
Prior to 2008, a bank might have borrowed reserves from another bank because:
A. banks never borrowed from the Fed. B. it kept its reserves too low and could not meet Fed requirements. C. borrowing reserves from other banks is the only way to gain access to reserves. D. it was in danger of becoming insolvent and collapsing.
The following appeared in a newspaper article: "Inflation in the Lehigh Valley during the first quarter of [the year] was less than half the national rate... So, unlike much of the nation, the fear here is deflation-when prices sink so low that the CPI drops below zero Do you agree with the reporter's definition of deflation?
A. Yes. When prices fall too low, the CPI is negative B. Yes. Deflation is caused by a negative CPI C. No. Deflation is defined as a negative inflation rate D. No. Deflation occurs when the nominal interest rate is greater than the real interest rate