we will focus on one essay that points out in a very concise and well explained manner the mandates of the Federal Reserve Bank AKA "The Fed". TheFederal Reserve's dual mandate implies that the monetary policy goals of theFederal Reserveare to foster economic conditions that achieve both (1) stable prices and (2) maximum sustainable employment. This idea is quite interesting when considering that those could be contradictory of each other.

Please read the essay and your Chapter 13 for answering the following questions:

essay: file:///Users/Shared/Dual%20Mandate%20of%20the%20Fed.pdf

1. Please indicate why pursuing both (1) stable prices and (2) maximum sustainable employment can be contradictory of each other? What possible actions could the Fed take that can be leading both of those measures in opposite directions.

2. The Fed is just one of many Central Banks in the world, however, it is one of the few with a dual mandate system. Most central banks in the world are single-mandate systems, where the Central Bank only needs to achieve stability in prices, but it is up to society and governments to pursue economic growth. Do you think the Fed should move towards a single mandate system, and if yes, should it focus on stable prices or should it focus on maximizing employment growth?