Suppose the Fed were required to conduct monetary policy so as to hold

the unemployment rate below 4%, the goal specified in the

Humphrey-Hawkins Act. What implications would this have for the

economy?

2. The statutes of the recently established European Central Bank (ECB)

state that its primary objective is to maintain price stability. How does

this charter differ from that of the Fed? What significance does it have

for monetary policy?

3. Do you think the Fed should be given a clearer legislative mandate

concerning macroeconomic goals? If so, what should it be?