If economic data reveals that inflation is rising, the Fed:
A. does not need to know the state of real GDP growth in order to justify increasing the growth rate of the money supply.
B. may increase the growth rate of the money supply without really knowing the state of real GDP growth.
C. may reduce the growth rate of the money supply without really knowing the state of real GDP growth.
D. will also at that time know the state of real GDP growth and can respond accordingly.
Ans: C. may reduce the growth rate of the money supply without really knowing the state of real GDP growth.
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The federal income tax code of the United States is
A) progressive. B) proportional. C) regressive. D) progressive for individuals but proportional for married couples.
Do you think it is correct policy that the federal government is not required to finance all of its expenditures with tax revenues and is allowed to borrow? What are the implications of this policy?
What will be an ideal response?