The purpose of this assessment is to analyze how Fed can contain inflation with help of its policy tools.
Assuming that the Fed judges inflation to be the most significant problem in the economy and that it wishes to employ all of its policy instruments except interest on reserves, explain how the Fed should implement its three policy tools to contain inflation.
In your essay, focus on the following questions:
- What are the different policy tools the Fed uses to address significant economic problems?
- What problems can inflation cause in an economy?
- Which policy tool or combination of policy tools would work best to contain inflation?
- Does the policy tool or combination of policy tools differ in case of low inflation?
Submit your response in a Microsoft Word document with the following specifications:
- Font: Arial; Point 12
- Spacing: Double
- Page length: 3 pages, excluding the APA title and Reference page
- Include an APA title page. Refer to the sample APA title page (please see attached).
- Cite the source in APA format in-text and on the Reference page.
The Essay assessment will be evaluated using the following criteria:
- Did you explain the policy tools the Fed uses to address significant economic problems?
- Did you correctly explain how the Fed should implement its three policy tools to contain inflation?
- Did you use macroeconomic terminologies in your essay, wherever possible?
- Did your thoughts flow coherently?
- Did you meet the page length requirements?
- Did you adhere to APA standards?
Did you adhere to Standard English grammar, spelling, and punctuation requirements?