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Fed primary goal is to cure inflation

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Assume that the Fed's primary goal is to cure inflation. How can it use open market operations to achieve its goal? What is a possible adverse effect of this action by the Fed.

to Cure inflation, the Fed may use a restrictive monetary policy which will reduce economic growth and inflationary pressure. A possible adverse effect is an increase in the unemployment rate. Show your work by using IS-LM framework. Discuss in detail the repercussion of this on the different economic variables such as GDP, Price level, consumption, investment.

Reference no: EM133311634

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