If the Fed Decided to Target Price Levels and Inflation

Multiple Choice

If the Fed decided to target price levels and inflation was lower than its target for a period of time, the Fed would be required to

A) temporarily raise inflation above its target to reach its price level target.
B) temporarily lower its inflation target to match its price level target.
C) permanently lower its price level target to align it with the inflation rate.
D) permanently raise inflation above its target to reach and maintain its price level target.