The US Federal Reserve has a stable price (2% inflation) target and a full employment (5 to 5.2% unemployment) target.
The diagram shows the inflation rate and unemployment rate that existed between 2007 and 2014.
What can be concluded about the performance of Federal Reserve economic policy, 2007 to 2014?
1 )
The continuing deflation meant failure in the inflation target.
2 )
The inflation target was achieved less frequently than the employment target.
3 )
The least successful period for economic policy was experienced in 2007.
The nearest to complete policy success was achieved in 2008.
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