Monetary Policy: The Negative Real Shock Dilemma

Date: 
2017-08-15 05:32:20
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Imagine a negative real shock, like an oil crisis, just hit the economy. How should the Fed respond?
Decreasing the money supply will help with inflation, but make growth worse. Increasing the money supply will improve growth, but inflation will climb higher. What’s the Fed to do?!
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Type of Learning Material: 
Video
Original NID: 
24646