Some members of Congress have proposed alaw that would make price stability the solegoal
Chapter 21, Problem 13(choose chapter or problem)
Some members of Congress have proposed alaw that would make price stability the solegoal of monetary policy. Suppose such a lawwere passed.a. How would the Fed respond to an event thatcontracted aggregate demand?b. How would the Fed respond to an event thatcaused an adverse shift in short-run aggregatesupply?In each case, is there another monetary policy thatwould lead to greater stability in output?
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