As mentioned in Chapter 28, the United States Federal Reserve has two mandates w
As mentioned in Chapter 28, the United States Federal Reserve has two mandates when setting monetary policy - keep annual inflation low (around 2-3%) and the unemployment rate low (around 5%). Typically, efforts to adjust the money supply to cause inflation to decrease causes unemployment to increase and vice versa. Now, imagine a situation where the United States faces high inflation and high unemployment (called stagflation, was issue in late 1970s). What do you think the Federal Reserve should do in this situation? Your assignment is submit a paper, 1-2 pages, in which you outline what you think the Federal Reserve should do if faced with stagflation. Be sure to include what you think the consequences would be for your proposed actions. Please write the paper in Microsoft Word. Once completed, please upload it in this assignment, which is due Sunday at 11:59PM.

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