What can the federal reserve bank do to keep output

Reference no: EM13186506

What is the difference between monetary policy and fiscal policy? In what sense are fiscal and monetary policy similar? Explain.

ii) Suppose that consumers become pessimistic about the future health of the economy. What will happen to aggregate demand, output, and employment in the short run? Use the AD/AS figure to illustrate.

iii) Considering the macroeconomic effects of pessimism, what might the President and Congress have to do to keep output and employment stable? Use your AD/AS figure to explain and illustrate.

iv) In the same circumstances, what can the Federal Reserve Bank do to keep output and employment stable? Use your AD/As figure to explain and illustrate.

Reference no: EM13186506

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