Assignment Setting Provide a monetary policy recommendation based on a description of the state of the economy provided below and to explain how their policy recommendation will affect the economy. Your deliverable may include graphs and figures from credible news or research articles as long. as the source is clearly stated. Suppose the Federal Open Market Committee (FOMC) releases the following statement about the state of the economy: "Information received by the FOMC indicates that inflation increased at a brisk pace, while the unemployment rate remains somewhat below its estimated natural rate. Price increases in goods and services are primarily driven by higher wages. Commodity prices and transportation costs remain near their average for the last 20 years." Questions Question 1 - Provide a brief comparison of this assessment of the economy with the dual mandate of Federal Reserve and describe whether the Federal Reserve is currently achieving the goals of the dual mandate. Question 2 - Provide a monetary policy recommendation based on this assessment of the economy. Question 3 Provide a comprehensive reasoning explaining why the recommendation you gave in response to Question 2 is appropriate action, and how you expect the relevant macroeconomic variables (output/economic activity, inflation, unemployment rate, wages) to respond to your recommendation. Now consider the channels through which your monetary policy recommendation is expected to affect the economy. Question 4 -Describe why and how your recommendation will affect banks and banks' lending policies. Please identify and explain three channels through which the supply of credit will be affected. Question 5 -Identify and explain at least two ways through which consumer demand will be affected by your recommendation. Question 6 - Consider two firms: Firm A finances itself with floating-rate loans and firm B finances itself with fixed-rate bonds. Discuss how your recommended monetary policy will affect each firm; and which firm is more likely to immediately respond to the recommended policy.