“Money and Monetary Policy and Inflation”
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Given our current economic situation, determine the steps that the Federal Reserve should take to help stabilize our economy. Next, explain how each of the following variables will be affected by proposed steps that you have identified: money supply, interest rates, inflation rate, aggregate demand, and output. Provide support for your response.
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From this week’s e-Activity, examine two (2) methods that the Federal Reserve can implement to support a stronger economic recovery. Provide support for each method in your response.
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e-Activity:
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Go to the Federal Reserve Website to read the press release titled “Federal Reserve issues FOMC Statement,” dated September 21, 2011 located at http://www.federalreserve.gov/newsevents/press/monetary/20110921a.htm. Be prepared to discuss.
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