Multiple Choice
One reason the Fed tolerates ongoing inflation is because it
A) believes that the CPI understates the actual inflation rate
B) believes that the CPI overstates the actual inflation rate
C) accepts the idea that a zero inflation rate would make labor markets work more smoothly
D) wants to focus more on price stability than on full employment
E) is uncertain about the long-run stability of the Phillips curve
Correct Answer:
Verified
Correct Answer:
Verified
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