Over one time horizon or another,Fed policy decisions influence
A)inflation and employment.
B)inflation but not employment.
C)employment but not inflation.
D)neither inflation nor employment.

Question

Quizplus · Accepted Answer

The Federal Reserve's monetary policy decisions directly impact both inflation and employment levels. For example, if the Fed raises interest rates, it can lead to lower inflation but potentially also slower job growth. Alternatively, if the Fed lowers interest rates, it can stimulate job growth but potentially also increase inflation. Therefore, Fed policy decisions can impact both economic indicators over various time horizons.

Over One Time Horizon or Another,Fed Policy Decisions Influence