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Can you please explain the following topics? MACROECONOMICS THE FED The policy targets of the Fed...

Can you please explain the following topics?

MACROECONOMICS

THE FED

The policy targets of the Fed in the short run and the long run as of 2016

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Answer #1

Macroeconomics is a branch of economics which deals with the behavior, peformance and decision making of the economy as a whole. It focuses on parameters like inflation, unemployment rate , GDP and national income. It takes into account the aggrgate economy rather than individuals.

The FED is the central Bank of the U.S.A. It is the institution which makes all the monetory policies of the country. It is the one which decides interest rates and carries out Open market Operations.

Short run targets.

a. To keep the interest rates stable.

b. to promote employent

Long run

a. To keep inflation rate stable , around 3 %.

b. To reduce the enemployment.

c. To keep the economy strong

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