Comment on my classmate post:

The economy is going through ups and downs in the past several years. There have been multiple elements that have helped with the hardship of the economy. As Covid hit the economies around the world hit a weird spot and everything spiked.The interest rates have gone up immensely over the past years but have been on a steady rise consistently. The economy is massively inflated so the government is doing things to make up for it such as raising interest rates, and overnight rates.

Monetary policy is very effective, the main goals of Monetary policy is to employ as many people as possible, stabilize the economy and keep interest rates very moderate. Monetary policy is good for long term stability in the economy and keeping it safe essentially. With monetary policy there is less available credit on hand. By having this it ensures less spending, and promotes more saving.

A few actions to combat inflation would be to implement monetary policy, this would reduce the money supply, this also comes hand with the interest rates and keeping them manageable, and moderate. Monetary policy is great for inflation and lowering them. The government may use wage and price controls to manage the inflation however this does not in turn work in the long run due to the fact that that can cause a further recession and job loss.

High inflation rates have been directly associated with low unemployment rates. This is due to the fact that when prices are raised and people have elastic and inelastic demands whatever prices get raised to be people needto afford what they are buying.