Conflicts in Monetary Policy

Conflicts in Monetary Policy

Asked by 2 years ago
0 points

Goals of monetary policy are to "promote maximum employment, inflation

(stabilizing prices), and economic growth." If economists believe it's possible

to achieve all the goals at once, the goals are inconsistent. There are

limitations to monetary policy.

The term "maximum employment" means that we should try to hold the

unemployment rate as low as possible without pushing it below what

economists call the natural rate or the full- employment rate. Pushing

unemployment below that level would cause inflation to rise and thereby ruin

the other objective--stable prices, economic growth, which is our objectives

in the long run.

Overall financial stability will lead to a better balance between consumption

and saving that will make resources available for investment...

Conflicts in

1 Answer

Answered by 2 years ago
0 points

Oh Snap! This Answer is Locked

Conflicts in Monetary Policy

Thumbnail of first page

Excerpt from file: Goalsofmonetarypolicyareto"promotemaximumemployment,inflation (stabilizingprices),andeconomicgrowth."Ifeconomistsbelieveit'spossible toachieveallthegoalsatonce,thegoalsareinconsistent.Thereare limitationstomonetarypolicy. Theterm"maximumemployment"meansthatweshouldtrytoholdthe

Filename: conflicts-in-monetary-policy-55.rtf

Filesize: < 2 MB

Downloads: 0

Print Length: 3 Pages/Slides

Words: NA

Your Answer

Surround your text in *italics* or **bold**, to write a math equation use, for example, $x^2+2x+1=0$ or $$\beta^2-1=0$$

Use LaTeX to type formulas and markdown to format text. See example.

Sign up or Log in

  • Answer the question above my logging into the following networks
Sign in
Sign in
Sign in

Post as a guest

  • Your email will not be shared or posted anywhere on our site

Views: 2
Asked: 2 years ago