Question

In his speech Monetary Policy and the Dual Mandate, Frederic Mishkin states: “…the level of maximum...

In his speech Monetary Policy and the Dual Mandate, Frederic Mishkin states: “…the level of maximum sustainable employment is not something that can be chosen by the Federal Reserve because no central bank can control the level of real economic activity or employment over the longer run.” What is the reasoning behind this statement?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer: Reason behind the Statement

Exaplnation:

Monetary policy will definitely help boost the economy's maximum resilience by low and stable inflation. But any effort to use stimulating monetary policy to retain jobs above its long-term sustainable rate would eventually lead to an increasing trajectory of inflation which, as a result, would ultimately weaken the productive potential of the economy, with serious adverse implications for household employment and income.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
In his speech Monetary Policy and the Dual Mandate, Frederic Mishkin states: “…the level of maximum...
In his speech Monetary Policy and the Dual Mandate, Frederic Mishkin states: “…the level of maximum sustainable employment is not something that can be chosen by the Federal Reserve because no central bank can control the level of real economic activity or employment over the longer run.” What is the reasoning behind this statement? Does it imply that the Federal Reserve has no ability to boost the economy in times of recession?
In his speech Monetary Policy and the Dual Mandate, Frederic Mishkin states: “…the level of maximum...
In his speech Monetary Policy and the Dual Mandate, Frederic Mishkin states: “…the level of maximum sustainable employment is not something that can be chosen by the Federal Reserve because no central bank can control the level of real economic activity or employment over the longer run.” Does it imply that the Federal Reserve has no ability to boost the economy in times of recession?
The Federal Reserve has a dual mandate of full employment and price stability. Oftentimes this mandate...
The Federal Reserve has a dual mandate of full employment and price stability. Oftentimes this mandate is challenging as there is a short term trade-off between unemployment and inflation. From 2008 to 2015, however, inflation was consistently below the target rate while unemployment was well above its natural level. Should the Fed have pursued a more aggressive monetary policy to raise inflation and lower unemployment? Choose one from below and state which school of economics your answer is subscribing. Then,...
In a speech, titled Recent Economic Developments, Monetary Policy Considerations and Longer-Term Prospects (Links to an...
In a speech, titled Recent Economic Developments, Monetary Policy Considerations and Longer-Term Prospects (Links to an external site.)Links to an external site., in June 2016, Jerome Powell, a member of the Federal Reserve’s Board of Governors, then, stated that the fraction of the U.S. population aged 25 to 54 who were working or actively looking for work “is now below those of most other advanced economies, including the U.K., France and Germany, for example” (para. 7). He also stated, “I...
a. Monetary Policy involves changing taxes and government spending/ the design of currency/ exports/ the money...
a. Monetary Policy involves changing taxes and government spending/ the design of currency/ exports/ the money supply.   In the United States, Monetary Policy is implemented by the Federal Reserve/ President and Congress/ Secretary of the Treasury/ states. b. Contractionary Monetary Policy/ Lower prices/ Expansionary MonetaryPolicy/ Larger coins can be used to address a Recessionary Gap; while Expansionary MonetaryPolicy/ smaller coins/ Contractionary Monetary Policy/ higher prices can be used to address an Inflationary Gap. c.  To enact Contractionary Monetary Policy, the central bank...
1. The most commonly used tool of monetary policy in the U.S. is the reserve requirement...
1. The most commonly used tool of monetary policy in the U.S. is the reserve requirement commercial banks must keep on hand at the Fed. TRUE/FALSE? 2. Open market operations take place when the central bank sells or buys U.S. Treasury bonds in order to influence the quantity of bank reserves and the level of interest rates. The specific interest rate targeted in open market operations is the discount rate.  TRUE/FALSE? 3. The Federal Reserve System is run by the government,...
23. The level of the money supply is determined by the level of economic activity and...
23. The level of the money supply is determined by the level of economic activity and adjusted at the margin via the implementation of monetary policy by the Federal Reserve. Thus, the U.S. is said to have: (a) an “elastic currency;” (b) a gold standard; (c) a rule-based monetary policy; (d) an independent central bank. 24. The Employment Act of 1946 established the original monetary policy mandate of the Fed. It called for: (a) balancing the federal budget deficit; (b)...
In a speech to the Fed conference in Jackson​ Hole, Wyoming mentioned in the chapter​ opener,...
In a speech to the Fed conference in Jackson​ Hole, Wyoming mentioned in the chapter​ opener, Fed Chair Janet Yellen observed that the financial crisis revealed the​ Fed's open double quote“inability to control the federal funds rate once reserves were no longer relatively scarce.close double quote” She went on to state​ that:open double quote“To address the challenges posed by the financial crisis ...the Federal Reserve significantly expanded its monetary policy toolkit.... Our current toolkit proved effective last December. In an...
Please add your comments and thoughts about the below paragraph: “Public policy must devise some measures...
Please add your comments and thoughts about the below paragraph: “Public policy must devise some measures to counteract these fluctuations and to ensure economic stability” therefore the Feds will step in and work to stabilize the economy through fiscal policy and money markets as a budgetary policy mechanism. (Moheeth, n.d.). The central banking system will need to work on the details or fine-tuning the economy in terms of growth and stability through monetary policy to include “cash reserve requirements, open...
Grab the "best hits" of information out of the document and write a summarizing 1 page....
Grab the "best hits" of information out of the document and write a summarizing 1 page. Information received since the Federal Open Market Committee met in January indicates that the labor market has continued to strengthen and that economic activity has been rising at a moderate rate. Job gains have been strong in recent months, and the unemployment rate has stayed low. Recent data suggest that growth rates of household spending and business fixed investment have moderated from their strong...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT