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Which is easier for the Federal Reserve to control: inflation or unemployment? Discuss.

Which is easier for the Federal Reserve to control: inflation or unemployment? Discuss.

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Answer #1

It would be difficult to make choice for the Fed to go with one variable only, but its monetary policy tool is more useful for the controlling inflation as it has tools to increase or decrease the interest rates as well increase or decrease the money supply. For unemployment, there is fiscal policy support needed along with monetary policy as demand can not be changed just with the changing money supply and interest rates.

so for Fed it is easier to control inflation.

the above is answer..

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