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Answers should be 2 pages. Use evidence in your analysis when possible.
The Federal Reserve Bank is worried about Covid relief spending causing inflation and wants to reduce inflationary pressures.
A. Describe how the Covid relief spending could possibly cause inflation (the mechanism by which it could cause prices to go up).
B. What policy tools could the Federal Reserve Bank use to reduce inflationary pressures and how would they work?
C. Describe how the actions you describe in parts A and B could affect your Industry? Be as specific as possible.
Suppose policymakers want to return inflation to its 2019 level as quickly as possible and then keep inflation constant. What path should policymakers choose for the real interest rate? What are the resulting paths of output and inflation?
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If the Federal Reserve attempts to continue reducing unemployment by manipulating monetarypolicy, which of the following would you expect tosee?
consider the economic data for country aunemployment level of 15natural rate of unemployment is 6.required reserves is
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