The Role of Monetary Policy in the Economy

Click on the links below and Read the articles. You can also use pdf. files with the articles posted in Content - Week 5 - Articles for Discussion week 5 area.

• How does monetary policy affect the U.S. economy?

https://www.frbsf.org/education/teacher-resources/us-monetary-policy-introduction/real-interest-rates-economy/

• Understanding the Role of Monetary Policy in the Economy by Christine Smith, (Tuesday, March 31, 2020)

https://www.stlouisfed.org/open-vault/2020/march/understanding-role-monetary-policy-economy

• Monetary Policy: Stabilizing Prices and Output by Koshy Mathai

https://www.imf.org/external/pubs/ft/fandd/basics/monpol.htm

In your initial response to the topic you have to answer all questions:

1. Discuss the effect of monetary policy on inflation. To what extent can monetary policy influence inflation?
2. How can adjusting interest rates make an impact on economy?
3. Discuss the effect of interest rates on employment in the short run and in the long run.
4. Describe the mechanism how changes in monetary policy affect output and prices in the economy.
5. Reflection - the students also should include a paragraph in the initial response in their own words, using macroeconomic terminology, reflecting on specifically what they learned from the assignment and how they think they could apply what they learned in the workplace or in everyday life.

respond with value added comments based on #5 reflection only!!