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Assume the Fed's Target for Unemployment Is 4% to 5

Question 220

Multiple Choice

Assume the Fed's target for unemployment is 4% to 5%, and its target for inflation is 2% to 3%. If the unemployment rate is 10% and the inflation rate is 2%, the Federal Reserve will most likely


A) raise the discount rate.
B) buy bonds.
C) lower the reserve requirement.
D) sell bonds.

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