How does the Fed’s monetary policy affect economic conditions?
The Fed’s monetary policy affects prices, economic growth and employment. The Fed’s monetary policy has an impact with attention to the time value of money and credit in the economic system.
When the Federal Reserve has decreased amounts, it will have decreased amounts of money to lend, which will raise the interest rates, resulting in a slowdown of the economy and vice versa.
The interest rates affect the cost of borrowing by households and businesses, which affects their amount of expenditures. The aggregate demand for products and services affects unemployment by the number of people employed.
Describe the economic trade-off faced by the Fed in achieving its economic goals.
A stimulative monetary policy can increase economic
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