« previous next »

Author Question: Explain monetary policy goals and discuss any goal conflicts in the long run and the short run. ... (Read 53 times)

mp14

  • Hero Member
  • *****
  • Posts: 534
on: Jun 29, 2018
Explain monetary policy goals and discuss any goal conflicts in the long run and the short run.
 
  What will be an ideal response?

Question 2

In a dynamic economy, there will always be some frictional unemployment.
 
  Indicate whether the statement is true or false


meganlapinski

  • Sr. Member
  • ****
  • Posts: 333
Reply #1 on: Jun 29, 2018
Answer to Question 1

Monetary policy has three goals: price level stability, maximum employment, and moderate long-term interest rates. In the long run, these goals all coincide and are best met by keeping the inflation rate low. In the short run, however, there is a tradeoff: Higher inflation can lead to lower unemployment and hence higher employment. So in the short run, higher employment can be attained but at the cost of higher inflation.

Answer to Question 2

TRUE


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

According to animal studies, the typical American diet is damaging to the liver and may result in allergies, low energy, digestive problems, and a lack of ability to detoxify harmful substances.

Did you know?

In the United States, congenital cytomegalovirus causes one child to become disabled almost every hour. CMV is the leading preventable viral cause of development disability in newborns. These disabilities include hearing or vision loss, and cerebral palsy.

Did you know?

The tallest man ever known was Robert Wadlow, an American, who reached the height of 8 feet 11 inches. He died at age 26 years from an infection caused by the immense weight of his body (491 pounds) and the stress on his leg bones and muscles.

Did you know?

Eating carrots will improve your eyesight. Carrots are high in vitamin A (retinol), which is essential for good vision. It can also be found in milk, cheese, egg yolks, and liver.

Did you know?

Oxytocin is recommended only for pregnancies that have a medical reason for inducing labor (such as eclampsia) and is not recommended for elective procedures or for making the birthing process more convenient.

Long-term studies of the Glanville fritillary butterfly, Melitaea cinxia, have provided exceptional Long-term studies of the Glanville fritillary butterfly, Melitaea cinxia, have provided exceptional
Transformation and Evolution of a Long-Period Comet Transformation and Evolution of a Long-Period Comet
How Long Does Poverty Last? How Long Does Poverty Last?
Government in America: People, Politics, and Policy, AP Government in America: People, Politics, and Policy, AP
National Patient Safety Goals for Acute-Care Hospitals National Patient Safety Goals for Acute-Care Hospitals
The executive legislative "struggle" over foreign policy The executive legislative "struggle" over foreign policy
Video: Baroreceptor Reflex

For a complete list of videos, visit our video library