During times of rising inflation, the Fed will undertake monetary policy or "tight money policy."

You will answer the following questions listed below. You will submit a Word document that will answer the following questions. Please submit your work using proper APA formatting. What actions should the Fed take if it believes the economy is about to experience a high rate of inflation? Now, let’s assume you are the President of the Fed and you have to make certain decisions in our economy. If the Fed orders a contractionary monetary policy, describe what will happen to the following variables relative to what would have happened without the policy: The money supply Interest rates Investment Consumption Net Exports The aggregate demand curve Real GDP The price level It should be minimum 3 word count with work cited page please.

The policy lever most commonly used by the Fed is   changing the discount rate changing the reserve requirement foreign exchange operations open market operations

if the current unemployment rate exceeds the natural rate the fed should increase the federal fund rate  true or false

Which of the below statements DOES NOT CORRECTLY describe the immense power or policy choice of the Federal Reserve (the Fed)? Group of answer choices   The Fed can inject money into the financial system after sudden shocks, such as the 1987 stock market crash or the terrorist attacks on Sept. 11, 2001.   The Federal Reserve controls the money supply and therefore the credit tap for the economy.   The Fed can use monetary policy to counteract economic downturns or prevent them from happening.   When the Fed opens the credit tap and increases the money supply, interest rates rise and people buy less and borrow less.

Four meetings in 2008 at which the Fed changed the target for the federal funds rate are shown below.   January 30, 2008 March 18, 2008 October 8, 2008 October 29, 2008       Pick one of these dates and find out why it chose to change its target for the federal funds rate on that date. https://www.federalreserve.gov/monetarypolicy/fomc_historical_year.htm

You often read in the newspaper that the Fed has just lowered the discount rate.  Does this signal that the Fed is moving to a more expansionary monetary policy? Why or why not?

How might the credibility of the Fed’s commitment to reduce inflation affect the sacrifice ratio?

Which of the following is NOT one of the factors in the FED "rule" used to determine if Monetary Policy action is required? other factors like world events that may impact the US economy price level and inflation the marginal propensity to consume (MPC) real GDP and its effect on unemployment rates

Between 1950 and 1975, the average annual rate of change in the money supply was slightly less than 4 percent. Has the Fed expanded the money supply more (or less) rapidly than this 4 percent long-term rate during the past 12 months? The past 24 months? Is the Fed's current monetary policy restrictive or expansionary? Explain.