The Fed has a dual mandate to keep prices stable and employment full.

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Tapping into the Strategic Petroleum Reserve to help offset rising oil prices is another way to keep prices stable, albeit short term.

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Firms may also keep prices stable because they are providing insurance to customers who dislike volatile prices, especially when buying expensive things.

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Those measures require the federal government to purchase billions of dollars worth of milk to keep prices stable, with stability defined in 1949 terms.

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"To keep prices stable, the Fed must see to it that the quantity of money changes in such a way to offset movements in velocity and output, " he wrote in this newspaper in 2003.

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The Central Bank of Iraq recently broadened the range of tactics it uses to mop up excess liquidity in the system and maintain the dinar's de facto peg to the dollar, which, given the primitive state of Iraq's financial system, is the best mechanism the bank has to keep prices stable.

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This will put pressure on the country's ability to maintain exports and keep oil prices stable.

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Wegmans and Costco have already committed to keep prices on their own-label products stable.

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Rep. Kevin Brady, a Texas Republican who is vice chairman of the Joint Economic Committee, is seeking to pass the Sound Dollar Act, which would end the Fed's mandate to keep unemployment down, instead having the central bank focus only on stable prices.

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