On March 15, 2020, the Federal Reserve Board held an emergency meeting in response to the large economic contraction caused but the coronavirus pandemic.

3. On March 15. 2MB. the Federal Reserve Board held an emergency meeting in response to the large economic contraction caused by the coronavirus pandemic. After the meeting. the Fed released a press statement that included this paragraph: "Consistent with its statutory mandate. the Committee seeks to foster maximum employment and price stability. The effects of the coronavirus will weigh on economic activity in the near term and pose risks to the economic outlook. In light of these developments. the Committee decided to lower the target range for the federal funds rate to D to 1K4 percent. The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.' This action will help support economic activity. strong iabor market conditions. and ination returning to the Committee's symmetric 2 percent objective. a. What is the Federal Reserve's statutory mandate. and how is it reflected in this statement? It. What decision did the committee reach in this meeting? c. The committee used open market operations and a change in interest on reserves (103.) to lower the target range of the federal funds rate from 1 to 1.25 percent to i] to v.25 percent. What kind of open market operations would lower the target range of federal funds rate in the desired direction? :1. Ultimately; how would you expect this change in the federal funds rate to affect the long-term real interest rate, employment, and the money supply