Monetary policy works to stabilize economic conditions by using three tools to increase or reduce the money
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Question:
Monetary policy works to stabilize economic conditions by using three tools to increase or reduce the money supply: reserve requirements, interest rates, and open market conditions. Some economists believe that monetary policy is a short-term solution to a long-term problem, and that people will eventually regret artificially stimulating the economy.
To complete the Discussion activity, write a post that answers the following questions:
- Describe your opinion of the use of monetary policy.
- Do you think it should be used at all? Explain.
- What would be the consequences of eliminating monetary policy, and why?
- What are the long-term consequences of keeping monetary policy? Explain.
Post your response to the discussion board.
Related Book For
Macroeconomics
ISBN: 978-1319120054
3rd Canadian edition
Authors: Paul Krugman, Robin Wells, Iris Au, Jack Parkinson
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