Suppose Workers Do Not Believe the Fed Will Implement Its

Multiple Choice

Suppose workers do not believe the Fed will implement its announced monetary policy plans and the Fed wants to achieve low unemployment.In this situation the Fed would be best off:

A) implementing a policy of high money growth.
B) announcing and implementing a policy of low money growth.
C) announcing a policy of high money growth and implementing a policy of low money growth.
D) following a policy that forces the actual inflation rate below the expected inflation rate.
E) promoting a low rate of inflation and adjusting actual policy plans to economic conditions.