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Use economic theories and terminologies to analyze and explain the questions.
1. Why did the U.S. Congress establish the Federal Reserve as an independent agency?
2. What are the two conflicting goals of bankers? How do these conflicting goals get resolved in the federal funds market?
3. How does monetary policy affect equilibrium GDP? How can it address the problem of recession or slow growth? How can it address the problem of inflation (demand-pull)?
4. What is the basic objective of monetary policy? What are the major strengths of monetary policy? Why is monetary policy easier to conduct that fiscal policy?
This document contains various important questions and their appropriate answers in the subject field of Economics.
Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.
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