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Should the Federal Reserve continue raising interest rates to fight inflation? How does changing the interest rate influence the economy in relation to the money
Should the Federal Reserve continue raising interest rates to fight inflation? How does changing the interest rate influence the economy in relation to the money supply? Exchange rates? Aggregate demand? Examples to consider include the 2008 financial crisis, or interest rates in the 1980s that were increased to fight inflation during the 1970s? -How does the concept of monetary policy help one understand the significance of the money supply in relation to interest rates in the market? -What are the costs and benefits of implementing contractionary versus expansionary monetary policies? Using your knowledge of expansionary and contractionary monetary policies, and considering the economic circumstances surrounding the COVID-19 pandemic where inflation is high and the economy is down, discuss whether the government uses contradictory monetary policies to reduce inflation. What is the cost of using contractionary monetary policy in today's economy
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