Question
The Fed's dual mandate consists of promoting the following in the U.S.
ceonomy:
OMaximum employment, stable prices, and moderate long-term
interest rates
Ofull employment; below 2% inflation
OPrice stablitity and low unemployment
ONone of the above
| The Fed's dual mandate consists of promoting the following in the U.S. |
| ceonomy: |
| OMaximum employment, stable prices, and moderate long-term |
| interest rates |
| Ofull employment; below 2% inflation |
| OPrice stablitity and low unemployment |
| ONone of the above |
Ask by May Bond. in the United States
Nov 30,2024
Upstudy AI Solution
Tutor-Verified Answer
Answer
Maximum employment, stable prices, and moderate long-term interest rates.
Solution
The Fed’s dual mandate consists of promoting the following in the U.S. economy:
- Maximum employment, stable prices, and moderate long-term interest rates.
Therefore, the correct answer from the options provided is:
- Maximum employment, stable prices, and moderate long-term interest rates.
The other options do not accurately reflect the Fed’s dual mandate.
Answered by UpStudy AI and reviewed by a Professional Tutor
Like
error msg
Explain 
Simplify this solution The Deep Dive
The Federal Reserve’s dual mandate was established in 1977, emphasizing its commitment to fostering a healthy economy through maximum employment and stable prices. This means they’re working hard to ensure that as many people as possible can find jobs while keeping inflation in check so that everyone’s money retains its value. Balance is key, as they also aim for interest rates that don’t veer off into extremes, ensuring a stable financial environment for all.
In practice, the Fed uses tools like interest rate adjustments and open market operations to influence economic activity. When unemployment is high, they might lower interest rates to encourage borrowing and spending. Conversely, if inflation is climbing too steeply, they may raise rates to cool down the economy. It’s a tightrope walk requiring constant monitoring and adjustment, and it’s absolutely vital!
