The Federal Reserve Bank has two mandates when setting monetary policy - keep annual inflation around 2% and the unemployment rate around 5%.Typically, efforts to adjust the money supply to cause inflation to decrease causes unemployment to increase and vice versa.

Now, imagine a situation where the United States faces high inflation and high unemployment (stagflation).What do you think the Fed should do in this situation?Be sure to include what you think the consequences would be for your proposed actions.