Question: Economics How does the Fed use monetary policy to affect the price level and real GDP? In setting monetary policy, why must the Fed use

Economics

How does the Fed use monetary policy to affect the price level and real GDP?

In setting monetary policy, why must the Fed use forecasts of the state of the economy? Can these forecasts be wrong?

Briefly state how changes in interest rates will affect the components of Aggregate Demand.

What, briefly, are the Federal Reserve's four main monetary policy goals?

Which two goals fall under the Fed's dual mandate?

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