What are the main influences on the FOMC federal funds rate decision?
What will be an ideal response?
Though the Federal Reserve does not use an explicit formula to determine changes in its targeted federal funds rate, the Fed seems to respond to the inflation rate, the unemployment rate, and the output gap when determining its federal funds target rate.
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The monetary policy target the Federal Reserve focuses primarily on today is
A) M1. B) M2. C) the interest rate. D) the inflation rate. E) the unemployment rate.
The rational-ignorance effect refers to the
a. lack of incentive voters have to become well-informed about candidates and issues because their vote is unlikely to affect the outcome of an election. b. fact that most people choose to become just as well-informed when making choices as consumers as they do when making choices as voters. c. lack of rational analysis on the part of voters when they choose not to become informed about candidates and issues even though this knowledge would produce great personal benefit to them. d. problem of not enough information being supplied to voters because politicians are not spending enough on campaign adds to inform voters of their positions on issues.