13. Recently, some members of Congress have proposed a law that would make price stability the sole...

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13. Recently, some members of Congress have proposed a law that would make price stability the sole goal of monetary policy. Suppose such a law were passed.

a. How would the Fed respond to an event that contracted aggregate demand?

b. How would the Fed respond to an event that caused an adverse shift in short-run aggregate supply?

In each case, is there another monetary policy that would lead to greater stability in output?

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Principles Of Macroeconomics

ISBN: 9780324171891

3rd Edition

Authors: N. Gregory Mankiw

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Question Posted: Sep 27, 2024 07:01 AM

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13. Recently, some members of Congress have proposed a law that would make price stability the sole...

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Principles Of Macroeconomics

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