Federal Reserve raises benchmark interest rate to confront stubborn inflation

Study the questions and tasks

Work through the material below, or start the interactive practice above to complete an attempt. Try the exercises before opening any answer or transcript sections, then use them to review your work.

Practice level

C1. Try this level if you can follow the instructions and understand most of the language; choose an earlier level if you need more support.

Question formats

Single choice

How to approach this practice

Read the questions, then listen before opening the transcript. Notice names, numbers and any corrections the speaker makes.

1. Question 1 · Single choice

   Choose one answer.

   When did the rate increase occur relative to the previous increase?

   Return to the passage, recording or visual
   1. Immediately after another increase
   2. More than three years after the previous increase
   3. Before any earlier increase
   4. Exactly three years after the previous increase
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   Answer

   More than three years after the previous increase

   The report emphasizes that more than three years had elapsed.

   The Federal Reserve raised its benchmark interest rate Wednesday, marking the first increase in more than three years.

2. Question 2 · Single choice

   Choose one answer.

   What does a benchmark interest rate represent?

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   1. A reference point for borrowing costs
   2. A measure of consumer confidence
   3. A forecast of price changes
   4. A lender’s required profit
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   Answer

   A reference point for borrowing costs

   The narration defines it as a reference point for borrowing costs.

   A benchmark interest rate is a reference point for the cost of borrowing.

3. Question 3 · Single choice

   Choose one answer.

   Which expenses are specifically mentioned as potentially affected?

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   1. Rent and utility payments
   2. Food and medical expenses
   3. Car loans and credit-card balances
   4. Mortgages and student tuition
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   Answer

   Car loans and credit-card balances

   The report names car loans and credit-card balances.

   Someone borrowing money to buy a car may now face a more expensive loan.

4. Question 4 · Single choice

   Choose one answer.

   What may a higher borrowing cost require over time?

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   1. A smaller financial commitment
   2. A larger financial commitment
   3. Immediate repayment in full
   4. A change in employment
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   Answer

   A larger financial commitment

   The narration states that borrowers may need a larger financial commitment.

   In either situation, the cost associated with borrowing can increase, requiring a larger financial commitment over time.

5. Question 5 · Single choice

   Choose one answer.

   What does the source explicitly decline to specify about lenders?

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   1. Whether consumers use credit
   2. How individual lenders adjust terms
   3. Why inflation remains stubborn
   4. When the announcement occurred
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   Answer

   How individual lenders adjust terms

   It provides no further account of how lenders will alter their terms.

   The source specifically identifies these two consumer effects; it does not provide further details about how individual lenders will adjust their terms.

6. Question 6 · Single choice

   Choose one answer.

   What additional pressure might higher credit costs place on?

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   1. Central-bank officials only
   2. Households and other borrowers
   3. Foreign governments exclusively
   4. Financial journalists
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   Answer

   Households and other borrowers

   The report identifies households and other borrowers as vulnerable groups.

   The Federal Reserve is responding to inflation it describes as stubborn, while a higher cost of credit can place additional pressure on households and other borrowers.

7. Question 7 · Single choice

   Choose one answer.

   What familiar reality does the announcement connect to policy?

   Return to the passage, recording or visual
   1. The price of borrowed money can shape daily choices
   2. Inflation eliminates all consumer borrowing
   3. Central banks control every household purchase
   4. Lenders determine monetary policy independently
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   Answer

   The price of borrowed money can shape daily choices

   It links monetary policy with the everyday price of accessing credit.

   The announcement links the central bank’s inflation response to a familiar financial reality: the price of access to borrowed money can affect everyday decisions.

What to review next

Listen again to difficult sections, then open the transcript to check what you heard. Repeat a useful phrase aloud and try the recording once more without the text.

A focused practice result shows how you did on these tasks. Use several activities across skills to decide what to study next; one practice score does not certify an overall CEFR level.

Before you practise: a worked example

Listen for the final information, especially when a speaker corrects or changes an earlier statement.

Example transcript: “Let’s meet at five — actually, half past five would be better.” What is the final suggested time?

The final suggested time is 5:30. Actually signals a correction; the first time is replaced by the later suggestion.

This teaching example is separate from the scored questions. After your test, compare any mistakes with the explanation and revisit the topic before trying again.