Question
The Federal Reserve has a dual mandate that states the two primary goals are: price stability and maximum employment. Why do these goals conflict in
The Federal Reserve has a dual mandate that states the two primary goals are: price stability and maximum employment. Why do these goals conflict in the short run?
a. | If the Fed focuses on inflation, then they will not have enough bonds to fight unemployment. | |
b. | If the Fed works to expand the economy, the inflation rate will be low but it will cause unemployment. | |
c. | If the Fed focuses on unemployment, then they will not have enough bonds to fight inflation. | |
d. | If the Fed works to expand the economy, the unemployment rate will be low but it will cause inflation |
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