Discuss federal reserve policy

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Reference no: EM133494100

Assignment:

Consider the following Federal Reserve policy and its effects on the following stakeholders. Be sure to frame your answer in the form of an "ethics" question that considers the harm and benefit to each stake holder. Write three to four paragraphs describing how the stakeholder uses money, how the policy would hurt or help them, and what if you think anything should be done to limit the help or harm to that stakeholder.

Policy: The output gap is relatively high (let's say 2%) and the inflation gap is higher (let's say 4%) and prevailing interest rates are 2%. According to an equally weighted Taylor Rule (, what should be the short run interest rate target. Suppose the Federal Reserve lowers rates to 1.5% instead, justifying the decreased rates by pointing out slow recovery since the Covid 19 pandemic.

A community bank which primarily makes profits from mortgages and local business lending and holds large amounts of "stable and secure" US Treasury Bonds.

An online art forger who has been selling duplicate NFT's for the past year to high net worth investors.

Reference no: EM133494100

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