Problem
The federal government's decision to "lockdown the macroeconomy" was placed on top of the aforementioned negative AD response by consumers. FED planners decided the lockdown would have severe ramifications: Dallas Federal Reserve President Robert Kaplan predicted that the U.S. unemployment rate will likely reach 20 percent. (He was WAY OFF, remember that!) Between the end of February and May 10, the Federal Reserve has expanded its balance sheet from just over $4 trillion to more than $6.6 trillion. This is a significant "real negative shock" to the economy. Explain the dilemma the Fed faces on using monetary policy to deal with this real shock.