1.Imagine you are the chair of the Federal Reserve Board of Governors and it is 2024. Unemployment is 3%, the labor force participation rate is back to its pre-pandemic level, and inflation has been averaging over 4% for the last year.

a. Given the Dual Mandate, what should your concerns be? Be as specific as possible.

b.In formulating appropriate monetary policy to this situation, which of our 3 models is the most appropriate to employ to answer this question and explain why?

c.Illustrate the above state of the economy using this model.

d.What policy or policies should you propose as the Fed Chair to fulfill the Dual Mandate? Explain the effects of your proposed policy using the appropriate model.

e.What might fiscal policy makers do to help the Fed achieve its Dual Mandate? Again, explain using the appropriate model.