Should the Fed Be Worried About Low Inflation?

Should the Fed Be Worried About Low Inflation?

Assessment

Interactive Video

Business, Social Studies

University

Hard

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The video discusses concerns about low inflation in the U.S., as highlighted by Janet Yellen and the FOMC minutes. It explains the Fed's preferred inflation gauge, the Personal Consumption Expenditures Price Index, which has been below target for an extended period. The video also examines inflation expectations, particularly the five-year forward break-even inflation rate, which is at a 14-year low. The Fed's discussions on inflation expectations are ongoing, with no firm conclusions yet.

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5 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What did Janet Yellen indicate about inflation in relation to the labor market?

It will decrease as the labor market weakens.

It will fluctuate unpredictably.

It will move up towards the Fed's target as the labor market strengthens.

It will remain stable regardless of the labor market.

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the Fed's preferred measure of inflation?

Personal Consumption Expenditures Price Index

Producer Price Index

Gross Domestic Product Deflator

Consumer Price Index

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

For how many consecutive months has the Fed's preferred inflation gauge been below target?

31 months

12 months

36 months

24 months

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the current reading of the five-year forward break-even inflation rate?

2.5%

1.9%

3.0%

2.0%

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What conclusion did the Fed reach regarding future inflation expectations?

They concluded it would remain stable.

They decided it required more time and analysis.

They concluded it would rise sharply.

They decided it was not a concern.