The Federal Open Market Committee
A)by law must focus on maintaining low inflation rather than stabilizing output.
B)by law must focus on stabilizing output rather than maintaining low inflation.
C)by law must follow a mechanical rule that takes into account deviations of unemployment from its natural rate and deviations of inflation from a target.
D)operates with almost complete discretion over monetary policy.

Question

Quizplus · Accepted Answer

The Federal Open Market Committee (FOMC) operates with a high degree of discretion over monetary policy, allowing it to respond to changing economic conditions. There is no specific law mandating it to follow a mechanical rule or to prioritize either low inflation or output stabilization exclusively.