Assignment
1. Under what circumstances might the Fed's maximum employment goal conflict with its price stability goal?
2. How does monetary policy affect aggregate demand through wealth effects?
3. What is meant by disinflation? If the United States were experiencing disinflation,what would you conclude about the relationship between actual output (aggregatedemand) andpotential output (aggregate supply)? The unemployment rate?
4. Go to the Board's website and read the most recent statement issued by theFOMC. Identify the sentences that are intended to influence expectations heldby the public.
5. What is meant by the zero-bound constraint? How has it affected the ability ofthe Fed toachieve its goals? How has the credit crunch affected the ability of theFed to achieve its goals?
6. What is an adverse feedback loop? How does this work to worsen the financialsystem and the economy?
7. What approach has the Dodd-Frank bill of 2010 taken to prevent financial crisesfrom developing? Explain.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.