Assignment
For this assignment, please examine three economic scenarios and determine how the Federal Reserve might address each one. You will then compare these monetary policy actions to fiscal policy. Use the template pictures below to organize.
A. Analyze each scenario. The template contains three economic scenarios. Read and consider each one with care. Compare to your notes on monetary policy. For each scenario, answer the following questions in complete sentences
a. Would the Fed address the scenario with expansionary or contractionary policy? Explain.
b. What is a specific monetary action the Fed might use in this scenario? Identify the tool and how the Fed would use it. Explain how this would address the scenario.
c. What is a specific fiscal action that Congress might use in this scenario?
B. Evaluate. Which type of policy, fiscal or monetary, do you think is more effective in today's U.S. economy? Explain your perspective, referencing an event from within the past 10 years. Make at least one complete paragraph.