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Explain why supply shocks create more of a challenge for the Federal Reserve.
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- One of the missions of the Federal Reserve is to strive for low interest rates and low unemployment. Why is it difficult to have both of these for long periods of timedescribe the actions the Federal Reserve took to maintain a healthy economy during the recent economic crisis. in your opinion, were the actions necessary? were the Fed’s actions effective?what role does independence play in the Fed’s ability to maintain its control in performing its mandates?
- How do expansionary, tight, contractionary, and loose monetary policy affect aggregate demand?What do Federal Reserve economists use the Federal Reserve Board's model of the U.S. economy for? It is used only for forecasting. It is used for forecasting and policy analysis. It is used only to describe the economy. It is used only for policy analysis.Explain the FED role to cope with rising inflation.
- What is the appropriate monetary policy to be implemented by the Federal Reserve System during periods of high inflation? Explain the steps the Fed will take.are open market operations the most important tool that the Fed has to help stabilize the economy?What uncertainties does the federal reserve face in selecting the timing and tools of implementing monetary policy?
- Why is there a lag between the Fed’s actions and the economy’s response?What specific actions could the Federal Reserve take to decrease the money supply and therefore raise interest rates to enact Contractionary Monetary Policy?Why does the Fed manipulate the money supply ? Why might a price "freeze" help monetary policy to succeed.
