According to the most recently available data as of July 2022, the unemployment rate is 3.6% and inflation according to the PCE index is about 6%. Knowing the Fed's operational goals, including an estimated NAIRU of 4%, answer the following questions:

a) Is the Fed achieving its goal for inflation? Briefly explain your answer.

b) Is the Fed achieving its goal for full employment? Briefly explain your answer.

c) Given your answers to (a) and (b), how should the Fed conduct monetary policy to achieve its goals? In particular, what actions would one expect it to undertake with regard to the federal funds rate and why?

d) Since the Fed does not set the federal funds rate, what does it need to do to cause the federal funds rate change in the way it desires