Conflicts in Monetary Policy
Date Submitted: 07/16/2003 10:15:16
Category: / Business & Economy / Economics
Length: 3 pages (892 words)
Category: / Business & Economy / Economics
Length: 3 pages (892 words)
Goals of monetary policy are to 'promote maximum employment, inflation
(stabilizing prices), and economic growth.' If economists believe it's possible
to achieve all the goals at once, the goals are inconsistent. There are
limitations to monetary policy.
The term 'maximum employment' means that we should try to hold the
unemployment rate as low as possible without pushing it below what
economists call the natural rate or the full- employment rate. Pushing
unemployment below that …
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