In 2012, the FOMC stated for the first time that it aims at an inflation rate of 2 percent (based on the price index of personal consumption expenditures). How might this announcement help secure price stability?
Answer to relevant QuestionsDo you think the members of the ECB’s Governing Council should take formal votes? Why or why not? If they do vote, how do you think the votes should be allocated?How might the ECB’s pursuit of price stability as its primary objective restrict its response to the sovereign debt crisis in the euro zone? The FOMC statement of December 12, 2012, indicated that the target range for the federal funds rate would continue at least until the rate of unemployment falls below 6½ percent or the projected rate of inflation one to two ...Is the money-multiplier model still useful for policymakers? If not, why not? Suppose you examine the central bank’s balance sheet and observe that since the previous day, reserves had fallen by $100 million. In addition, on the asset side of the central bank’s balance sheet, securities had fallen ...
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