The Fed seeks a target rate of inflation of around _____.

A) 1 percent
B) 2 percent
C) 3 percent
D) 4 percent
E) 5 percent

Target Rate

A target interest rate set by the central bank in a country that guides monetary policy decisions, aiming to control inflation, encourage borrowing, or stabilize the economy.

Inflation

A measure of the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.