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6.Suppose that you are a member of the Board of Governors of the Federal Reserve System and the economy is experiencing an 8 percent inflation
6.Suppose that you are a member of the Board of Governors of the Federal Reserve System and the economy is experiencing an 8 percent inflation rate. Unemployment is at the full-employment level and the target interest rate is currently 4 percent. What change in the target interest rate would you want to make? How would this change get implemented? What impact would those implementation actions have on the lending ability of the banking system, the real interest rate, investment spending, aggregate demand, and inflation?
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