Which of the following best describes the expected trend in the inflation rate after the Federal Reserve took action in 2022?(1 point)

Question

Responses

The inflation rate will stabilize as the Federal Reserve enacts contractionary monetary policy.
The inflation rate will stabilize as the Federal Reserve enacts contractionary monetary policy.

The inflation rate will slowly decrease over 2023 and 2024 as the changes in monetary policy occur slowly.
The inflation rate will slowly decrease over 2023 and 2024 as the changes in monetary policy occur slowly.

The inflation rate will continue to grow in 2023 and 2024 as monetary policy targets a nine percent inflation rate.
The inflation rate will continue to grow in 2023 and 2024 as monetary policy targets a nine percent inflation rate.

The inflation rate will continue rising in 2023 as GDP continues growing in 2022.

Answer 1

The best description of the expected trend in the inflation rate after the Federal Reserve took action in 2022 would be:

The inflation rate will slowly decrease over 2023 and 2024 as the changes in monetary policy occur slowly.

This option reflects the understanding that while the Federal Reserve implemented contractionary monetary policy to combat high inflation, the effects of such policies typically take time to influence the economy and inflation rates.