The Fed's Policy Tools
The purpose of this assessment is to analyze how Fed can contain inflation with help of its policy tools.
Assessment Description:
Assuming that the Fed judges inflation to be the most significant problem in the economy and that it wishes to employ all of its policy instruments except interest on reserves, explain how the Fed should implement its three policy tools to contain inflation.
In your essay, focus on the following questions:
• What are the different policy tools the Fed uses to address significant economic problems?
• What problems can inflation cause in an economy?
• Which policy tool or combination of policy tools would work best to contain inflation?
• Does the policy tool or combination of policy tools differ in case of low inflation?
Submission Requirements:
Submit your response in a Microsoft Word document with the following specifications:
• Font: Arial; Point 12
• Spacing: Double
• Page length: 3 pages, excluding the APA title and Reference page
• Include an APA title page. Refer to the sample APA title page (please see attached).
• Cite the source in APA format in-text and on the Reference page.